<PAGE>
<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
____ SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 2, 1994
--------------------------------
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 1-9050
--------------------------------
HUDSON FOODS, INC.
- - --------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 71-0427616
- - ---------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1225 Hudson Road, Rogers, Arkansas 72756
- - --------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(501) 636-1100
- - --------------------------------------------------------------
(Registrant's telephone number, including area code)
Not Applicable
- - ----------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report.)
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
---- ----
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Sections 12, 13 or
15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court.
Yes No
---- ----
APPLICABLE ONLY TO CORPORATE ISSUERS:
As of July 27, 1994 Hudson Foods, Inc. had 7,822,925 shares of
$0.01 par value Class A Common Stock outstanding and 8,501,952
shares of $0.01 par value Class B Common Stock outstanding.<PAGE>
<PAGE>
PART 1 FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS
HUDSON FOODS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
October 2,
1993
July 2, As restated.
1994 (See note 2)
_________ _____________
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 492 $ 3,891
Receivables, net 65,829 57,452
Inventory:
Field inventory 41,604 35,247
Feed, eggs and other 19,348 21,318
Finished products 73,642 59,932
Other 7,595 7,275
________ ________
Total current assets 208,510 185,115
________ ________
Property, plant and equipment, net
of accumulated depreciation of
$115,757 & $101,337 219,801 205,613
Excess cost of investment, net 15,385 15,807
Other assets 9,810 9,968
________ ________
Total assets $453,506 $416,503
======== ========
The accompanying notes are an integral part of the condensed consolidated
financial statements
/TABLE
<PAGE>
<PAGE>
PART 1 FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS
HUDSON FOODS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
October 2,
1993
July 2, As restated.
1994 (See note 2)
_______ ____________
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $ 13,000 $ --
Current portion of long-term obligations 5,086 5,085
Accounts payable 35,267 31,555
Accrued liabilities 37,089 33,198
Deferred income taxes 11,466 11,466
________ ________
Total current liabilities 101,908 81,304
________ ________
Long-term obligations 85,493 88,985
________ ________
Deferred income taxes & deferred gain 73,209 72,312
________ ________
Stockholders' equity:
Common stock:
Class A, $.01 par value; 40,000,000 shares
authorized; issued 8,730,729 and 8,630,407
shares 87 86
Class B, $.01 par value; 40,000,000 shares
authorized; issued & outstanding 8,501,952
and 8,502,052 shares 85 85
Additional capital 88,450 87,638
Retained earnings 115,690 97,727
Treasury stock, at cost (933,854 &
958,358 Class A shares) (11,416) (11,634)
________ ________
Total stockholders' equity 192,896 173,902
________ ________
Total liabilities & stockholders' equity $453,506 $416,503
======== ========
The accompanying notes are an integral part of the condensed consolidated
financial statements
/TABLE
<PAGE>
<PAGE>
HUDSON FOODS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
For the For the
Three Months Ended Nine Months Ended
July 3, July 3,
1993 1993
July 2, As restated July 2, As restated
1994 (See note 2) 1994 (See note 2)
_____________________ ____________________
<S> <C> <C> <C> <C>
Sales $266,773 $224,887 $773,392 $676,726
________ ________ ________ ________
Costs and expenses:
Cost of sales 224,352 192,794 659,282 588,735
Selling 20,223 16,912 58,319 47,759
General & administrative 6,309 5,320 18,905 15,263
________ ________ ________ ________
Total costs and expenses 250,884 215,026 736,506 651,757
________ ________ ________ ________
Operating income 15,889 9,861 36,886 24,969
Other expense 1,442 1,719 4,988 6,751
________ ________ ________ ________
Income before income taxes 14,447 8,142 31,898 18,218
Income tax expense 5,616 3,151 12,600 7,093
________ ________ ________ ________
Net income $ 8,831 $ 4,991 $ 19,298 $ 11,125
======== ======== ======== ========
Earnings per share:
Primary $0.53 $0.30 $1.16 $0.72
======== ======== ======== ========
Fully diluted $0.52 $0.30 $1.14 $0.72
======== ======== ======== ========
Dividends per share:
Class A common $.030 $.030 $.090 $.090
======== ======== ======== ========
Class B common $.025 $.025 $.075 $.075
======== ======== ======== ========
Weighted average number of
common and common equivalent
shares outstanding:
Primary 16,697,370 16,520,604 16,585,355 15,523,779
========== ========== ========== ==========
Fully diluted 17,572,828 17,350,890 17,515,669 15,523,779
========== ========== ========== ==========
The accompanying notes are an integral part of the condensed consolidated
financial statements
/TABLE
<PAGE>
<PAGE>
HUDSON FOODS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
For the Nine Months Ended
July 3,
1993
July 2, As restated
1994 (See note 2)
__________________________
<S> <C> <C>
Operations:
Net income $19,298 $11,125
Items reflected in net income
not requiring cash:
Depreciation 15,867 16,114
Amortization 813 1,042
Deferred gain (2,083) (1,537)
Deferred income taxes (578) 746
Interest expense on 14% Debentures -- 1,227
Other (62) --
Changes in operating assets & liabilities (15,365) (13,757)
________ ________
Cash flows provided by operations 17,890 14,960
________ ________
Investments:
Purchase of property, plant & equipment (34,075) (21,489)
Disposition of property, plant and
equipment, net 3,814 23,121
Other (233) 1,720
________ ________
Cash flows provided by (used for) investments (30,494) 3,352
________ ________
Financing:
Addition (reduction) to notes payable 13,000 (8,300)
Addition to long-term obligations -- 3,370
Reduction of long-term obligations (3,491) (13,919)
Dividends (1,335) (1,263)
Exercise of stock options and other 1,031 510
________ ________
Cash flows provided by (used for) financing 9,205 (19,602)
________ ________
Decrease in cash (3,399) (1,290)
Cash and cash equivalents at beg. of period 3,891 3,949
________ ________
Cash and cash equivalents at end of period $ 492 $ 2,659
======== ========
Supplemental cash flow information:
Interest paid $4,904 $4,892
Income taxes paid $11,615 $5,604
The accompanying notes are an integral part of the condensed consolidated
financial statements
/TABLE
<PAGE>
<PAGE>
HUDSON FOODS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. The financial statements for the periods ended July 2, 1994
and July 3, 1993 include, in the opinion of management, all
adjustments (none of which were other than normal recurring
accruals) necessary to present fairly the results of operations
and cash flows for such periods. Results for the three and nine
month periods ended July 2, 1994 are not necessarily indicative of
the results which will be realized for the year ending October 1,
1994. The annual report for the year ended October 2, 1993 contains
additional information which should be read in conjunction with
these financial statements.
2. Accounting Change-Income Taxes. Beginning in fiscal year 1994,
the Company adopted Statement of Financial Accounting Standards No.
109 (SFAS 109), "Accounting for Income Taxes," which requires that
deferred income tax liabilities and assets be recognized for
differences between the tax basis of assets and liabilities and
their financial reporting amounts, measured by using presently
enacted tax laws and rates. The Company elected to apply the
provisions of SFAS 109 retroactively to September 28, 1986. As a
result, property, plant and equipment and deferred income taxes as
of October 2, 1993 were each increased by $8,234,000 from the
amounts previously reported to recognize the difference between the
assigned values and the tax basis of assets and liabilities
previously acquired in 1986 (Corbett Enterprises, Inc.), 1987
(Thies Companies, Inc.) and 1990 (Pierre Frozen Foods, Inc.). The
adoption of SFAS 109 did not effect net income since increases in
depreciation expense, due to adjustments for prior business
combinations, were offset by the amortization of the deferred
income taxes. The statements of operations for the three and nine
month periods ended July 3, 1993 have been restated to increase
cost of sales by $206,000 and $618,000, respectively, and decrease
income tax expense by a corresponding amount.
<PAGE>
<PAGE>
To the Board of Directors and Stockholders
Hudson Foods, Inc.
We have reviewed the condensed consolidated balance sheet of Hudson
Foods, Inc. and subsidiaries as of July 2, 1994 and the related
condensed consolidated statements of operations for the three month
and nine month periods ended July 2, 1994 and July 3, 1993, and
the condensed consolidated statements of cash flows for the nine
month periods ended July 2, 1994 and July 3, 1993. These financial
statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established
by the American Institute of Certified Public Accountants. A
review of interim financial information consists principally of
applying analytical procedures to financial data and making
inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted
in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the
financial statements taken as a whole. Accordingly, we do not
express such an opinion.
Based on our review, we are not aware of any material modifications
that should be made to the condensed consolidated financial
statements referred to above for them to be in conformity with
generally accepted accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the consolidated balance sheet as of October
2, 1993, and the related consolidated statements of operations and
cash flows for the year then ended (not presented herein); and in
our report dated November 2, 1993, we expressed an unqualified
opinion on those consolidated financial statements. In our
opinion, the information set forth in the accompanying condensed
consolidated balance sheet as of October 2, 1993 is fairly stated
in all material respects in relation to the consolidated balance
sheet from which it has been derived.
As described in note 2, in fiscal 1994 the Company changed its
method of accounting for income taxes.
Coopers & Lybrand
Tulsa, Oklahoma
July 22, 1994
<PAGE>
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
GENERAL
Hudson Foods, Inc. is a poultry producer and food processor. The
Company's profitability is affected by finished product prices,
the price of feed grains and other factors.
The Company's selling prices for some chicken and turkey products
are influenced by industry commodity market prices. However,
since many factors are involved in pricing, commodity market
prices should only be used as a general indicator of the
Company's selling prices.
For the first nine months of fiscal 1994, average commodity
broiler and turkey market prices were up 3 cents per pound and 4
cents per pound, respectively, from the averages for the first
nine months of fiscal 1993.
Inflation has not materially affected sales or cost of sales
during the current and prior year.
<PAGE>
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
THIRD QUARTER OF FISCAL 1994 COMPARED WITH
THIRD QUARTER OF FISCAL 1993.
Sales increased $41.9 million for the third quarter of fiscal
1994 from the same period of fiscal 1993. The sales increase was
primarily due to higher finished product prices and volumes for
chicken, turkey and processed meat products.
Chicken volume increased primarily due to the Company's
entrance into new international markets and sales to new
customers.
Turkey and processed meat volumes increased primarily due to
new product lines, increased consumer demand and/or new
customers.
Total poultry sales volume was 213.9 million dressed pounds,
representing 65.1% of total sales dollars. This compares with the
fiscal 1993 third quarter total of 178.9 million dressed pounds,
which was 63.3% of total sales dollars.
Processed meat sales volume, some of which included poultry raw
materials, was 53.4 million and 48.8 million pounds for the third
quarter of fiscal 1994 and fiscal 1993, respectively.
Cost of sales increased $31.6 million for the third quarter of
fiscal 1994 from the same period of fiscal 1993. The cost of
sales increase was primarily due to increased volume and higher
feed and ingredient costs.
Selling and general and administrative expenses as a percentage
of sales increased slightly to 10.0% from 9.9% for the third
quarter of fiscal 1994 and fiscal 1993, respectively. Selling
expenses increased due to increased commissions, rebates,
advertising, distribution, demonstration, new product development
and storage expenses primarily related to new products and
increased international sales. Also, general and administrative
expenses were up as a result of increased incentive compensation
accruals.
Other expense for the third quarter of fiscal 1994 and fiscal 1993
is composed of interest expense and interest income.
<PAGE>
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
NINE MONTHS OF FISCAL 1994 COMPARED WITH
NINE MONTHS OF FISCAL 1993.
Sales increased $96.7 million for the first nine months of fiscal
1994 from the same period of fiscal 1993. The sales increase was
primarily due to higher finished product prices and volumes for
chicken and processed meat products and higher selling prices for
turkey products.
Chicken volume increased primarily due to the Company's
entrance into new international markets and sales to new
customers.
Processed meat volumes increased primarily due to new product
lines, increased consumer demand and/or new customers.
Total poultry sales volume was 608.9 million dressed pounds,
representing 61.8% of total sales dollars. This compares with
total poultry sales volume for the first nine months of fiscal 1993
of 553.3 million dressed pounds, which was 62.1% of total sales
dollars.
Processed meat sales volume, some of which included poultry raw
materials, was 170.1 million and 156.6 million pounds for the first
nine months of fiscal 1994 and fiscal 1993, respectively.
Cost of sales increased $70.5 million for the first nine months of
fiscal 1994 from the same period of fiscal 1993. The cost of
sales increase was primarily due to increased volume and higher
feed and ingredient costs.
Selling and general and administrative expenses as a percentage
of sales increased to 10.0% from 9.3% for the first nine months of
fiscal 1994 and fiscal 1993, respectively. Selling expenses
increased in the areas of commissions, rebates, advertising,
distribution, demonstration, new product development and storage
expenses primarily related to new products and increased
international sales. Also, general and administrative expenses
were up as a result of incentive compensation accruals.
Other expense for the first nine months of fiscal 1994 is composed
of interest expense and interest income. Other expense for the
first nine months of fiscal 1993 is composed of interest expense,
interest income and $.5 million bond issue and premium costs
resulting from the redemption of the Company's 14% Convertible
Subordinated Debentures.
<PAGE>
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
FINANCIAL CONDITION
At July 2, 1994, working capital was $106.6 million compared with
$103.8 million at October 2, 1993 and the current ratio was 2.05
to 1 and 2.28 to 1 at July 2, 1994 and October 2, 1993,
respectively.
Beginning in fiscal year 1994, the Company adopted Statement of
Financial Accounting Standards No. 109 (SFAS 109), "Accounting for
Income Taxes," which requires that deferred tax liabilities and
assets be recognized for any difference between the tax basis of
assets and liabilities and their financial reporting amounts
measured by using presently enacted tax laws and rates. The
Company elected to apply the provisions of SFAS 109 retroactively
to September 28, 1986. As a result, the Company restated the
October 2, 1993 balance sheet as follows: 1) property, plant and
equipment cost increased $13.5 million, 2) accumulated
depreciation increased $5.3 million and 3) deferred income taxes
increased $8.2 million. (See note 2 of the condensed consolidated
financial statements.)
The Company's capital budget for fiscal 1994 contemplates aggregate
capital expenditures of approximately $50 million to upgrade and/or
expand current production facilities and related equipment. The
capital expenditures have been and will be financed by operations,
borrowings under the Company's credit agreement and/or lease
arrangements. The Company also plans to build a new chicken
complex in Kentucky and is now researching alternative sites.
Additionally, during the quarter, the Company broke ground for a
beef processing plant in Columbus, Nebraska, that will supply
hamburger patties to the Burger King restaurant chain.
For the first nine months of fiscal 1994 and 1993, the Company
had capital expenditures of $34.1 million and $21.5 million,
respectively. Those expenditures were primarily for upgrading
and expanding production facilities and related equipment.
The Company uses the farm price method of inventory valuation for
income tax reporting which results in current deferred income taxes
for financial reporting. The Company anticipates that it will be
able to maintain its inventory at current levels and accordingly,
does not expect a significant portion of the current deferred
income tax to be paid in the near future. At July 2, 1994, current
deferred income taxes relating to the farm price method were $13.3
million.<PAGE>
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
FINANCIAL CONDITION (CONTINUED)
Historically, the Company's operations have been financed through
internally generated funds, borrowings, lease arrangements and
the issuance of common stock. On April 26, 1994, the Company
entered into a $100 million unsecured credit agreement that expires
April 26, 1997. The credit agreement, among other things, limits
the payment of dividends to $2.8 million in any fiscal year and
limits annual capital expenditures and lease obligations. It
requires the maintenance of minimum levels for working capital and
tangible net worth. It requires that the current ratio, leverage
ratio and cash flow coverage ratio be maintained at certain levels.
It also limits the creation of new secured debt to $25 million and
new unsecured short-term debt with parties outside the credit
agreement to $20 million.
Also, during the quarter, the Company entered into an unsecured
term loan agreement with a financial institution giving the Company
the right to borrow up to $50 million by issuing fixed rate senior
notes. The company had not borrowed under the agreement at July
2, 1994. The agreement expires February 24, 1996.
At July 2, 1994, the Company had available credit lines of $79.6
million. The Company had short-term debt borrowed under the line
of $13 million and had outstanding letters of credit of $7.4
million.
<PAGE>
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
On March 16, 1993, the United States of America, by the
Attorney General of the United States acting at the
request of the Environmental Protection Agency, filed a
complaint against the Company in the United States
District Court for the South District of Indiana,
Evansville Division, as civil action No. NA 93-19-C,
alleging violations of the federal Water Pollution
Control Act (the "Act"). The complaint seeks, among
other things, a permanent injunction preventing the
Company from discharging wastewater from one of its
processing facilities, and a civil penalty of up to
$25,000 per day for each violation of the Act. The
Company's motion to dismiss the complaint was recently
denied by the district court. Since this case is at an
early stage, it is not possible to estimate the amount
of civil penalties or other expenditures, if any, that
the Court may award. The Company plans to vigorously
contest this matter. Management believes that the
outcome will not have a material adverse effect on the
Company's consolidated financial position or results of
operations.
Item 2. Changes in Securities
Not Applicable.
Item 3. Defaults Upon Senior Securities
Not Applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
Not Applicable.
Item 5. Other Information
Not Applicable.
PART II - OTHER INFORMATION (CONTINUED)
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Exhibit Description of Exhibit Sequentially
Number Numbered Page
4a Trust indenture 8% Incorporated by
convertible subordin- reference from
ated debentures due Registration
2006 Statement No.
33-8889
4c Restated Certificate Incorporated by
of Incorporation of reference from
Hudson Foods, Inc., Registration
Section 4 Statement No.
33-15274
10a Revolving Credit Agreement
by and among Hudson Foods,
Inc., Cooperative Centrale
Raiffeisen-Boerenleenbank
B.A., "Rabobank Nederland,"
New York Branch, Bank of
America National Trust and
Savings Association,
Nationsbank of Texas,
National Association, Caisse
Nationale De Credit Agricole,
"Credit Agricole," Harris
Trust and Savings Bank and
Cooperative Centrale
Raiffeisen-Boerenleenbank,
B.A., "Rabobank Nederland,"
New York Branch, as Agent
dated as of April 26, 1994
10b Hudson Foods, Inc. Note
Purchase Agreement dated as
of May 18, 1994, $50,000,000
Fixed Rate Senior Notes,
Guaranteed by Hudson Farms,
Inc.
PART II - OTHER INFORMATION (CONTINUED)
11 Calculation of earnings
per share
15 Letter regarding unaudited
interim financial
information
(b) Reports on Form 8-K.
Not applicable.
<PAGE>
<PAGE>
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.
Hudson Foods, Inc.
Date 8-01-94 Michael T. Hudson
President
Date 8-01-94 Charles B. Jurgensmeyer
Chief Financial Officer<PAGE>
<PAGE>
<PAGE>
<PAGE>
EXHIBIT 10A
REVOLVING CREDIT AGREEMENT
by and among
HUDSON FOODS, INC.,
COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A.,
"RABOBANK NEDERLAND", NEW YORK BRANCH,
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
NATIONSBANK OF TEXAS, N.A.,
CAISSE NATIONALE DE CREDIT AGRICOLE,
HARRIS TRUST AND SAVINGS BANK
and
COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A.,
"RABOBANK NEDERLAND", NEW YORK BRANCH, as Agent
dated as of
April 26, 1994
<PAGE>
TABLE OF CONTENTS
Section Page
ARTICLE I - COMMITTED ADVANCES, BID RATE ADVANCES
AND CERTAIN FEES
1.01 The Facilities 1
1.02 Agency Fee 2
1.03 Facility Fee 2
ARTICLE II - TERMS OF THE ADVANCES
2.01 The Advances 2
2.02 Making the Committed Advances 2
2.03 Bid Rate Credits 4
ARTICLE III - REPAYMENT AND PREPAYMENT OF THE ADVANCES
3.01 Repayment, Optional Prepayment and Application of
Credit Payments 4
3.02 Interest 6
3.03 Increased Costs 8
3.04 Changes in Law Rendering Certain Libor Rate Advances
Unlawful 9
3.05 Payments and Computations 9
3.06 Payment on Non-Business Days 9
3.07 Pro Rata Committed Advances 9
3.08 Maximum Amount Limitation 10
3.09 Notation on Schedule 11
ARTICLE IV - CONDITIONS PRECEDENT
4.01 Conditions Precedent to Initial Advances 11
4.02 Conditions Precedent to All Advances 12
4.03 Failure to Provide Certificate 13
ARTICLE V - REPRESENTATIONS AND WARRANTIES
5.01 Representations and Warranties of the Borrower 13
ARTICLE VI - COVENANTS OF THE BORROWER
6.01 Affirmative Covenants 16
6.02 Negative Covenants 20
ARTICLE VII - EVENTS OF DEFAULT
7.01 Events of Default 23
ARTICLE VIII - DEFINITIONS
8.01 Certain Defined Terms 26
8.02 Construction 35
8.03 Currency 35
ARTICLE IX - THE AGENT
9.01 Authorization and Action 35
9.02 Duties and Obligations 35
9.03 Agent and Affiliates 36
9.04 Bank Credit Decision 36
9.05 Indemnification 36
9.06 Resignation of Agent 37
9.07 Exchange of Information 37
9.08 Benefit of the Banks Only 37
ARTICLE X - MISCELLANEOUS
10.01 Amendments, Etc. 38
10.02 Notices, Etc. 38
10.03 No Waiver; Remedies 38
10.04 Accounting Terms 39
10.05 Costs, Expenses and Taxes 39
10.06 Right of Set-off 39
10 07 Indemnification 40
10.08 Severability of Provisions 41
10.09 Binding Effect; Successors and Assigns;
Participations 41
10.10 Consent to Jurisdiction 42
10.11 Governing Law 42
10.12 Banks' Obligations Several, Not Joint 43
10.13 Execution in Counterparts 43
10.14 Waiver of Jury Trial 43
10.15 No Oral Agreements 43
10.16 Continuation of Existing Indebtedness, Liabilities
and Obligations 43
LIST OF SCHEDULES AND EXHIBITS
Schedule 5.01(j) Description of Certain Tax Matters
Schedule 6.02(a) Description of Certain Liens, Lease
Obligations, Etc.
Schedule 6.02(d) Description of Liabilities
Schedule 8.01 Subordinated Debt
Exhibit A Form of Promissory Note
Exhibit B Form of Guaranty
Exhibit C Form of Legal Opinion
Exhibit D Form of Notice of Committed Borrowing
Exhibit E Form of Request for Bids
Exhibit F Form of Outstandings Report
Exhibit G Form of Letter Agreement Described in Section
4.01(i)
<PAGE>
REVOLVING CREDIT AGREEMENT
Dated as of April 26, 1994
HUDSON FOODS, INC., a Delaware corporation (the "Borrower"),
COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A., "RABOBANK
NEDERLAND", NEW YORK BRANCH ("Rabobank") and the other commercial,
banking and financial institutions whose signatures appear on the
signature pages hereof or which hereafter become parties hereto
pursuant to Section 10.09 (Rabobank and such other additional
commercial, banking or financial institutions are sometimes
referred to hereinafter collectively as the "Banks" and
individually as a "Bank") and Rabobank, as agent for the Banks
hereunder (in such agency capacity, the "Agent"), agree as follows:
ARTICLE I
COMMITTED ADVANCES, BID RATE ADVANCES
AND CERTAIN FEES
SECTION 1.01. The Facilities. (a) Each Bank agrees,
severally and not jointly, on the terms and conditions hereinafter
set forth, to extend credit to the Borrower during the period from
the date hereof to the Termination Date (this and certain other
capitalized terms are defined in Section 8.01) by making advances
(the "Committed Advances") to the Borrower on a revolving basis
from time to time; provided that at no time shall any Bank be
obligated to make a Committed Advance in any amount which would
exceed the lesser of (i) such Bank's Available Commitment at such
time, or (ii) such Bank's Available Commitment Share of the
Committed Borrowing pertaining to such Committed Advance. Within
the foregoing limit, and subject to the terms and conditions
hereunder set forth, the Borrower may borrow pursuant to this
Section 1.01(a), prepay pursuant to Section 3.01(b), and reborrow
in accordance with this Section 1.01(a).
(b) Each Bank may, severally and not jointly, on the
terms and conditions hereinafter set forth, extend credit to the
Borrower during the period from the date hereof to the Termination
Date by making advances (the "Bid Rate Advances") to the Borrower
or otherwise extending Bid Rate Credit to the Borrower from time
to time; provided that at no time shall any Bank make a Bid Rate
Advance or otherwise extend any Bid Rate Credit in any amount which
would exceed the amount of such Bank's Available Commitment at such
time.
(c) The Borrower shall have the right, upon at least
five (5) Business Days' notice to a Bank, to terminate in whole or
reduce in part such Bank's Available Commitment (which shall
include the termination in whole or the reduction in part of the
obligation of such Bank to make Advances to the Borrower in the
amount specified in Section 1.01(a) in the event of such
termination or reduction), provided, however, that each partial
reduction shall be in the amount of $5,000,000 or an integral
multiple thereof.
(d) So long as no Event of Default shall have occurred
and be continuing at such time, the Borrower may request, at least
sixty (60) days prior to each anniversary of the date hereof, Agent
and the Banks to extend the Termination Date to the third
anniversary date next following the date of such determination.
Such request shall be in writing to Agent and each Bank. Within
the thirty (30) day period immediately following its receipt of
such request, each Bank shall notify the Borrower in writing
whether it elects to so extend the Termination Date. Any failure
by a Bank to so notify the Borrower shall be deemed a decision by
such Bank to not extend the Termination Date. No Bank shall be
obligated to extend the Termination Date, and if less than all of
the Banks elect to extend the Termination Date pursuant to this
Section 1.01(d), the Termination Date shall not be extended.
SECTION 1.02. Agency Fee. The Borrower agrees to pay to the
Agent, for its account, an annual agency fee (the "Agency Fee") in
an amount determined jointly by the Borrower and the Agent from
time to time and set forth in a separate letter agreement between
the Borrower and Agent (the "Agency Fee Letter").
SECTION 1.03. Facility Fee. The Borrower agrees to pay to
each Bank a facility fee on the amount of such Bank's Commitment
(as such Commitment may be reduced from time to time pursuant to
Section 1.01(c)) from the date hereof until the Termination Date
at the rate of one-quarter of one percent (0.25%) per annum,
payable in arrears on the last day of each calendar quarter during
the term of such Bank's Commitment, commencing on the last day of
the calendar quarter first occurring after the date hereof, and on
the Termination Date (the "Facility Fee").
ARTICLE II
TERMS OF THE ADVANCES
SECTION 2.01 The Advances. Each Advance shall be in an
amount of $500,000 or a greater amount which is an integral
multiple of $50,000.
SECTION 2.02. Making the Committed Advances. (a) Each
Committed Advance shall be made, to the extent that a Bank is so
obligated under Section 1.01, on notice from the Borrower in
writing in the form of Exhibit D hereto (a "Notice of Committed
Borrowing") to the Agent delivered before 11:00 A.M. (New York
City time) on, (i) in the case of a LIBOR Rate Advance, a Business
Day which is at least two (2) Business Days prior to the first day
of the Interest Period for such Committed Borrowing and (ii) in the
case of a Base Rate Advance, on the first day of the Interest
Period for such Committed Borrowing, containing the representations
and other information contemplated in Exhibit D hereto and
accompanied by a duly executed Outstandings Report dated as of the
first day of the Interest Period for such Committed Borrowing. The
Agent shall in turn promptly notify each Bank by telephone
(confirmed immediately by telex, cable or facsimile), telex, cable
or facsimile of the aggregate amount of, and the initial Interest
Period for, such Borrowing and such Bank's ratable portion of such
Borrowing. Each Bank shall, not later than 1:00 P.M. (New York
City time) on the date of such Borrowing specified in the notice
received from the Agent pursuant to the preceding sentence, deposit
such Bank's ratable portion of such Borrowing in same day funds to
the Agent's Depository Account and include in a communication
accompanying such deposit a reference that such funds pertain to
a Committed Borrowing by the Borrower under this Agreement. Not
later than 3:00 P.M. (New York City time) on the later of the date
of such Borrowing specified in such notice or the first Business
Day thereafter upon which the applicable conditions set forth in
Article IV have been fulfilled, Agent will make such Advance
available, to the extent that Agent is so obligated under Section
1.01, to the Borrower in same day funds at Agent's address referred
to in Section 10.02.
(b) Each Notice of Committed Borrowing shall be
irrevocable and binding on the Borrower and, in respect of the
Committed Borrowing specified in such Notice of Committed
Borrowing, the Borrower shall indemnify each Bank against any loss
or expense incurred by such Bank as a result of any failure to
fulfill on or before the date specified for such Borrowing the
applicable conditions set forth in Article IV, including, without
limitation, any loss (including loss of Anticipated Profits) or
expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by the Bank to fund the Advance
to be made by such Bank as part of such Committed Borrowing when
such Advance, as a result of such failure, is not made on such
date. Provided that notice shall have been given to Borrower of
the reasons therefor, determinations by a Bank for purposes of this
Section 2.02(b) shall be conclusive, provided that such
determinations are made reasonably and in good faith.
(c) Unless the Agent shall have received notice from a
Bank prior to the date of any Committed Borrowing that such Bank
will not make available to the Agent such Bank's ratable portion
of such Borrowing, the Agent may assume that such Bank has made
such portion available to the Agent on the date of such Borrowing
in accordance with subsection (a) of this Section 2.02 and the
Agent may, in reliance upon such assumption, make available to the
Borrower on such date a corresponding amount. If and to the extent
such Bank shall not have so made such ratable portion available to
the Agent, Rabobank may, in its sole discretion, make such ratable
portion so available, in which case such portion shall constitute
an additional Committed Advance made by Rabobank in connection with
such Committed Borrowing, and Rabobank's Commitment in connection
with such Committed Borrowing shall be deemed increased to the
extent required in order for Rabobank to make such portion so
available.
(d) The failure of a Bank to make the Committed Advance
to be made by it as part of any Borrowing shall not relieve any
other Bank of its obligation, if any, hereunder to make its
Committed Advance on the date of such Committed Borrowing, but no
Bank shall be responsible for the failure of any other Bank to make
the Committed Advance to be made by such other Bank on the date of
any Borrowing.
SECTION 2.03. Bid Rate Credits. From time to time, Borrower
may request of any one or more of the Banks, and any one or more
such Banks may in their sole and absolute discretion agree, to
extend credit to the Borrower in the form of Advances, Acceptances,
Letters of Credit or otherwise to the Borrower in such amount, at
such pricing and on such other terms and conditions as are agreed
to by the Borrower and such Bank from time to time and are not
inconsistent with the terms and provisions of this Agreement (each,
a "Bid Rate Credit" and collectively, the "Bid Rate Credits").
Such requests shall be made telephonically to such Banks as
Borrower may select in its sole discretion and confirmed promptly
in writing by delivery of completed Requests for Bids in the form
of Exhibit E hereto. Each Request For Bids shall be for an amount
not less than $500,000 (or, if greater, an integral multiple of
$500,000). No Bank shall be obligated to make any Bid Rate Credit
at any time unless such Bank in its sole and absolute discretion
then chooses to do so. Any and all Bid Rate Credits made by any
Bank(s) pursuant to this Section 2.03 shall be entitled to all of
the rights, protections, and benefits of this Agreement and each
of the other Loan Documents.
ARTICLE III
REPAYMENT AND PREPAYMENT OF THE ADVANCES
SECTION 3.01. Repayment, Optional Prepayment and Application
of Certain Payments. (a) The Borrower shall repay the aggregate
unpaid principal amount of all Committed Advances of each Bank in
accordance with the terms of the promissory notes of the Borrower,
in substantially the form of Exhibit A hereto (the "Notes"),
evidencing the indebtedness resulting from such Advances and
delivered to the Bank pursuant to Article IV or Section 10.08. All
payments of principal of, or interest, premium or other amounts on,
the Committed Advances shall be made by the Borrower to the Agent
in immediately available funds for the account of the holders of
the relevant Notes. All payments of principal of, or interest,
premium or other amounts on, the Bid Rate Credits shall be made by
the Borrower to the respective Bank or Banks which extended such
Bid Rate Credits in accordance with the terms and conditions agreed
upon between the Borrower and respective Bank or Banks with respect
thereto. All payments of the Facility Fee shall be made by the
Borrower to the Banks by a check payable to the order of each such
Bank which is duly honored upon the presentment thereof, or in
immediately available funds, in each case, pro rata according to
their respective Commitments. All payments of the fees described
in the Agency Fee Letter shall be made by the Borrower to the Agent
by check for the account of Rabobank as Agent. Payments shall be
made to the Agent and/or Banks at their respective addresses
specified in Section 10.02 (or at such other addresses as they may
have specified for such purposes in written notices to the
Borrower) not later than 1:00 p.m. (New York City time) on the due
date (or such time as is agreed upon by the Borrower and the Agent
and/or Banks, as the case may be, on the date due. The Agent shall
promptly remit to each Bank in immediately available funds such
Bank's share of all such payments received by the Agent for the
account of such Bank. All payments by the Borrower of principal,
interest, fees, indemnities and other amounts payable to any
recipient hereunder shall be made without setoff or counterclaim
and free and clear of, and without withholding or deduction for or
on account of, any present or future taxes now or hereafter imposed
on such recipient or its income, property, assets or franchise.
(b) The Borrower may, upon at least one Business Day's
notice to the Agent and the Banks, and if such notice is given the
Borrower shall, prepay the outstanding amount of any Advances in
whole or in part (pro rata among the Banks after and during the
continuance of an Event of Default), with accrued interest to the
date of such prepayment on the amount prepaid and any and all
amounts payable in respect thereof hereunder; provided, however,
that any prepayment of any Advance shall be made on, and only on,
the last day of an Interest Period for such Advance and, in the
event that any Bank receives payment of the principal of any
Advance other than on the last day of the Interest Period relating
to such Advance (whether due to prepayments made by the Borrower,
or due to acceleration of the Bank Obligations, or due to any other
reason), the Borrower shall pay to such Bank on demand any amounts
required to compensate the Bank for any additional losses, costs
or expenses which it may incur as a result of such payment.
Provided that notice shall have been given to Borrower of the
reasons therefor, determinations of such losses, costs or expenses
by a Bank for purposes of this Section 3.01(b) shall be conclusive,
provided that such determinations are made reasonably and in good
faith. All payments of principal made pursuant to this Section
3.01(b) shall be applied to the outstanding balance in inverse
order of maturity.
(c) Prior to the occurrence and continuation of an Event
of Default, each payment of principal shall be applied to such of
the maturing Committed Advances or Bid Rate Credits as the Borrower
shall direct; provided, that (i) any Advances of the Borrower
maturing the same day shall be paid pro rata among such Advances
and (ii) any payments in respect of a Committed Advance shall be
paid to the Agent for the account of the holders of the Notes,
which payments shall be remitted to such holders. Concurrently
with each remittance to any Bank of its share of any such payment
in respect of a Committed Advance, the Agent shall advise each Bank
as to the application of such payment. Following the occurrence
and during the continuation of an Event of Default, the Agent and
the Banks shall apply all collections and recoveries of the
Advances and the other Bank Obligations hereunder to payment of
outstanding Bank Obligations on a pro rata basis to each Bank based
on the respective amount of such Bank Obligations owed to each Bank
(whether or not mature and currently payable). Without limiting
the foregoing, in the case of payments of principal made following
the occurrence and during the continuation of an Event of Default
while there are Bank Obligations consisting of Letter of Credit
Liabilities and Acceptances then outstanding, each Bank primarily
or contingently liable with respect thereto may, at its option,
require the Borrower to deposit with such Bank funds equal to the
amount of payment of principal that such Bank would have received
with respect thereto had the undrawn face amount thereof been an
outstanding Advance (and if the Borrower fails to promptly make
such deposit, such Bank may advance such amount as a Committed
Advance). Any such deposit or advance described in the immediately
preceding sentence shall be held by such Bank as a reserve to fund
future payments by such Bank on such Letter of Credit Liabilities
and Acceptances, at such time as all of such Bank Obligations have
been drawn upon or expired any remaining amounts in such reserve
shall be applied to the other remaining Bank Obligations. The Agent
shall endeavor to promptly notify the Borrower and each Bank of the
occurrence of an Event of Default; provided, however, that a
failure by the Agent to give such a notice shall not impair the
rights of the Agent or any Bank with respect to any such Event of
Default or result in any liability to the Agent. The Banks and
Agent agree that if any distribution shall be made by the Agent
contrary to this Section 3.01(c) (whether because the Agent shall
not, at the time of distribution, have been aware of the occurrence
of any Event of Default or otherwise), the Banks shall cooperate
with the Agent to redistribute payments, collections or recoveries
in accordance with this Section 3.01(c).
SECTION 3.02. Interest. (a) The Borrower shall pay interest
on the unpaid principal amount of each Advance from the date of
such Advance until such principal is paid in full at the Applicable
Rate (as hereinafter defined) as set forth below.
(b) The period between the date of each Advance and the
date of payment in full of such Advance shall be divided into
successive periods, each such period being an "Interest Period" for
such Advance. Notwithstanding the duration of the applicable
Interest Period, interest on the unpaid amount of each Advance
shall be due and payable in accordance with Section 3.02(c) below
and the other applicable provisions of this Agreement. The initial
Interest Period for each Advance shall begin on the date of such
Advance and end on the last day of such period as selected by the
Borrower, and thereafter, each subsequent Interest Period for such
Advance shall begin on the last day of the immediately preceding
Interest Period for such Advance and end on the last day of such
period as selected by the Borrower in accordance with the terms
hereof. The duration of each such Interest Period for each Advance
shall be the period commencing on (and including) the date upon
which such Advance is made and (x) in regards to LIBOR Rate
Advances and those Base Rate Advances made for periods of one month
or greater, ending on (but excluding) the day numerically
corresponding to such date one month or three months thereafter,
in each case as selected by the Borrower in the relevant Notice of
Committed Borrowing, (y) in regards to Base Rate Advances made for
periods of less than one month, ending on the date on which the
principal amount of such Base Rate Advance becomes due and payable
and (z) in regards to Bid Rate Credits, ending on such date as is
agreed to between the Borrower and each Bank which makes such Bid
Credit available to the Borrower; provided, however, that:
(i) the duration of any Interest Period for any
Advance that commences before the Termination Date and
otherwise ends after the Termination Date shall end on
the Termination Date;
(ii) the duration of Interest Periods shall be the
same for all Committed Advances comprising a Committed
Borrowing;
(iii) any Interest Period which would otherwise end
on a day which is not a Business Day shall continue to
and end on the next succeeding Business Day, unless the
result would be that such Interest Period would be
extended to the next succeeding calendar month in which
case such Interest Period shall end on the next preceding
Business Day;
(iv) if there exists no numerically corresponding
day in such month, such Interest Period shall end on the
last Business Day of such month; and
(v) if the Borrower fails to select the duration
of any Interest Period for an Advance, the duration of
such Interest Period shall be one month or such other
duration as shall be required in order to comply with the
provisions hereof.
(c) The Borrower shall pay interest on the unpaid
principal amount of each Advance from the date of such Advance
until such principal amount is due, payable on (x) in the case of
Advances during any Interest Period with respect to which interest
is payable hereunder at the Base Rate (other than those made for
periods of less than one month), the last day of each calendar
month and on the Termination Date, and (y) in all other cases, on
the last day of each Interest Period for such Advance, at an
interest rate per annum equal at all times during such Interest
Period for such Advance to the Applicable Rate (as defined below);
provided, however, that for any Advance having an Interest Period
of three months, interest thereon shall be due and payable monthly
in arrears, commencing on the day one month after the first day of
such Interest Period, and on the last day of such Interest Period.
The term "Applicable Rate", as used herein, shall mean an interest
rate per annum equal at all times during the Interest Period then
applicable to such Advance to whichever of the following rates is
selected by the Borrower:
(i) in the case of Committed Advances, either (A) the
Base Rate, as the same shall from time to time change as and
when the Base Rate changes; or (B) one and one-quarter percent
(1.25%) in excess of the LIBOR Rate in effect on the first day
of such Interest Period; or
(ii) in the case of Bid Rate Advances, the Bid Rate in
effect on the first day of such Interest Period of such Bank
as is making such Bid Rate Advance;
provided, however, that if any Bank is unable to acquire the funds
upon which the interest rate described in clause (i)(B) or (ii)
immediately above is based for such Interest Period or the Borrower
fails to select an interest rate in accordance with the terms
hereof, then the Applicable Rate for such Interest Period will be
the Base Rate; provided, further, that in no event shall the
Applicable Rate exceed the maximum nonusurious interest rate, if
any, that at any time, or from time to time, may be contracted for,
taken, reserved, charged, or received under applicable state or
federal laws (the "Maximum Rate").
(d) All past due principal and, to the extent permitted
by applicable law, interest, fees and other amounts owing hereunder
upon the Advances, shall bear interest, from the date such amount
becomes due to the date such amount is paid in full, at the Default
Rate (as defined below) and shall be due and payable upon demand.
The term "Default Rate", as used herein, means the lesser of
(i) the Maximum Rate, or (ii) the rate per annum which shall from
day-to-day be equal to two percent (2%) in excess of the Base Rate.
SECTION 3.03. Increased Costs. (a) If either (i) the
introduction of or any change (including, without limitation, any
change by way of imposition or increase of reserve requirements)
in or in the interpretation of any law or regulation or (ii) the
compliance by any Bank with any guideline or request from any
central bank or other governmental authority (whether or not having
the force of law), shall result in any increase in the cost to any
Bank of making, funding or maintaining any Advance, then the
Borrower shall from time to time, upon demand by such Bank, pay to
such Bank additional amounts sufficient to indemnify such Bank
against such increased cost. A certificate as to the amount of
such increased cost, submitted to the Borrower by such Bank, shall,
in the absence of manifest error, be conclusive and binding for all
purposes, provided that the determination of such increased costs
shall have been made in good faith.
(b) If either (i) the introduction of or any change in
or in the interpretation of any law or regulation or (ii)
compliance by any Bank with any guideline or request from any
central bank or other governmental authority (whether or not having
the force of law) affects or would affect the amount of capital
required or expected to be maintained by any Bank and any Bank
determines that the amount of such capital is increased by or based
upon the existence of such Bank's commitment to lend hereunder and
other commitments of this type, then, upon demand by such Bank, the
Borrower shall immediately pay to such Bank, from time to time as
specified by such Bank, additional amounts sufficient to compensate
such Bank in the light of such circumstances, to the extent that
any Bank reasonably determines such increase in capital to be
allocable to the existence of such Bank's commitment to lend
hereunder. A certificate as to such amounts, submitted to the
Borrower by such Bank, shall, in the absence of manifest error, be
conclusive and binding for all purposes, provided that the
determination of such amounts shall have been made in good faith.
SECTION 3.04 Changes in Law Rendering Certain LIBOR Rate
Advances Unlawful. In the event that any change in any applicable
law (including the adoption of any new applicable law) or any
change in the interpretation of any applicable law by any judicial,
governmental or other regulatory body charged with the
interpretation, implementation or administration thereof, should
make it (or in the good-faith judgment of an affected Bank should
raise a substantial question as to whether it is) unlawful for such
affected Bank to make, maintain or fund LIBOR Rate Advances of a
certain type, then (a) such affected Bank shall promptly notify
each of the other parties hereto, (b) the obligation of all Banks
to make LIBOR Rate Advances of such type shall, upon the
effectiveness of such event, be suspended for the duration of such
unlawfulness, and (c) if the affected Bank so requests, the
Borrower shall, on such date as may be required by the relevant
applicable law, repay, prepay or convert to Base Rate Advances all
then outstanding LIBOR Rate Advances of such type made to the
Borrower by such affected Bank together with accrued interest
thereon and all amounts then due, if any, hereunder, other than
amounts that would otherwise be payable under Section 10.05(b).
SECTION 3.05. Payments and Computations. The Borrower shall
make each payment hereunder and under the Notes not later than 2:00
P.M. (New York City time) on the day when due in lawful money of
the United States of America to each Bank and/or the Agent, as the
case may be at its address referred to in Section 10.02 in same day
funds. The Borrower hereby authorizes each Bank, if and to the
extent payment of any amount is not made when due under any Loan
Document, to charge from time to time against any account of the
Borrower with such Bank any amount so due. All computations of
interest accrued at the Applicable Rate (but not the Base Rate or
Maximum Rate) hereunder and under the Notes and commitment fee
hereunder shall be made by each Bank on the basis of a year of 360
days for the actual number of days (including the first day but
excluding the last day) elapsed, and all computations of interest
accrued at the Base Rate or Maximum Rate shall be based upon a year
with 365 or 366 days, as appropriate).
SECTION 3.06. Payment on Non-Business Days. Whenever any
payment to be made hereunder or under the Notes shall be stated to
be due, on a day which is not a Business Day, such payment may be
made on the next succeeding Business Day (subject to Section
3.02(b)(iii) hereof), and such extension of time shall in such case
be included in the computation of payment of interest, commitment
fee or other fee, as the case may be.
SECTION 3.07. Pro Rata Committed Advances. The Borrower and
the Banks acknowledge and agree that all Committed Advances made
on or after the date hereof, and all increases and decreases
thereof, are to be made and incurred pro rata by the Banks in
accordance with such Bank's Available Commitment Share or in such
other manner as the Banks among themselves may agree from time to
time, except as otherwise required by Section 3.04; and each Bank's
actual outstanding Committed Advances shall be adjusted from time
to time by each Bank purchasing or selling at par from or to the
other Banks, as the case may be, a portion of these Committed
Advances simultaneously with each such increase or decrease, such
that each Bank's position in each shall equal such Bank's Available
Commitment Share at all times.
SECTION 3.08. Maximum Amount Limitation. Anything in this
Agreement or the other Loan Documents to the contrary
notwithstanding, neither Borrower nor any other Person liable for
the Bank Obligations shall ever be required to pay unearned
interest on any Note or any of the Bank Obligations, or ever be
required to pay interest on any Note or any of the Obligations at
a rate in excess of the Maximum Rate, if any. If the effective
rate of interest which would otherwise be payable under this
Agreement, any Note or any of the other Loan Documents would exceed
the Maximum Rate, if any, then the rate of interest which would
otherwise be contracted for, charged, or received under this
agreement, any Note or any of the other Loan Documents shall be
reduced to the Maximum Rate, if any, provided, however, that if at
any time thereafter such effective rate of interest shall be less
than the Maximum Rate, if any, the rate of interest contracted for,
charged, or received under this Agreement, any Note or any of the
other Loan Documents shall be the Maximum Rate until each Bank
shall have received the interest or discount it otherwise would
have received but for such limitation to the Maximum Rate. If any
unearned interest or discount or property that is deemed to
constitute interest (including, without limitation, to the extent
that any of the fees payable by Borrower, or any other Person
liable for the Bank Obligations to any Bank under this Agreement,
any Note, or any of the other Loan Documents are deemed to
constitute interest) is contracted for, charged, or received in
excess of the Maximum Rate, if any, then such interest in excess
of the Maximum Rate shall be deemed a mistake and canceled, shall
not be collected or collectible, and if paid nonetheless, shall,
at the option of the holder of such Note, be either refunded to
Borrower or other Person, or credited on the principal of such
Note. It is further agreed that, without limitation of the
foregoing and to the extent permitted by applicable law, all
calculations of the rate of interest or discount contracted for,
charged or received by any Bank under its Note, or under any of the
Loan Documents, that are made for the purpose of determining
whether such rate exceeds the Maximum Rate applicable to such Bank,
if any, shall be made, to the extent permitted by applicable laws
(now or hereafter enacted), by amortizing, prorating and spreading
during the period of the full terms of the Advances evidenced by
the Note, and any renewals thereof all interest at any time
contracted for, charged or received by such Bank in connection
therewith. This Section 3.08 shall control every other provision
of all agreements among the parties to this Agreement pertaining
to the transactions contemplated by or contained in the Loan
Documents, and the terms of this Section 3.08 shall be deemed to
be incorporated in every Loan Document and communication related
thereto.
SECTION 3.09. Notation on Schedule. Each Bank shall, and is
hereby authorized by Borrower to place appropriate notations on the
schedule to each Bank's Note evidencing the date, amount, interest
date and maturity of each Advance and the amount of each payment
of principal; provided, however, that the failure of a Bank to make
such notation shall not limit or otherwise affect the obligations
of Borrower under the Notes or this Agreement.
ARTICLE IV
CONDITIONS PRECEDENT
SECTION 4.01. Conditions Precedent to Initial Advances. The
effectiveness of this Agreement and the obligation of each of the
Banks to make its initial Advance is subject to the condition
precedent that the Agent shall have received at least two Business
Days before the day of such Advance the following, each dated the
day of such Advance, in form and substance satisfactory to the
Agent and the Banks:
(a) This Agreement and the Notes,
(b) A guaranty duly executed by Hudson Farms, Inc., an
Arkansas corporation (the "Guarantor", and together with the
Borrower collectively the "Loan Parties" and individually a "Loan
Party"), in substantially the form attached hereto as Exhibit B
(the "Guaranty"),
(c) Certified copies of Requests for Information or
Copies (Form UCC-11), or equivalent reports, listing all effective
financing statements which name the Borrower (under its present
name and any previous name) as debtor and which are filed in the
jurisdictions referred to in office of the Arkansas Secretary of
State, together with copies of such financing statements,
(d) Copies, certified by the Secretary, Assistant
Secretary, or Chief Financial Officer of each Loan Party of the
resolutions of the Board of Directors of such Loan Party approving
each Loan Document to which it is a party, and of all documents
evidencing other necessary corporate action and governmental
approvals, if any, with respect to such Loan Document, including,
without limitation, certificates of good standing and certified
copies of each Loan Party's Certificate of Incorporation and
Bylaws,
(e) A certificate of the Secretary, Assistant Secretary
or Chief Financial Officer of Borrower, dated as of the date of the
initial Advance, certifying (i) that no Event of Default exists on
the date of, or will exist as a result of, the initial Advance;
(ii) that the representations and warranties in Section 5.01 are
true and correct as of and immediately after the initial Advance;
(iii) that the Borrower has performed and complied with all
agreements and conditions required to be performed or complied with
it prior to or on the date of the initial Advance; and (iv) the
names and true signatures of the officers of Borrower authorized
to sign each Loan Document to which it is a party and the other
documents to be delivered by it hereunder,
(f) A favorable opinion of Messrs. Wright, Lindsey &
Jennings, counsel for the Loan Parties, in substantially the form
of Exhibit C and as to such other matters as the Banks may
reasonably request,
(g) The Agency Fee Letter, duly executed and delivered
by the Borrower to the Agent,
(h) Payment for the sole account of the Agent of the full
amount of the arrangement fee provided for in that certain letter
agreement dated February 25, 1994 between the Borrower and the
Agent, and
(i) A letter agreement, in substantially the form of
Exhibit G hereto, executed by all of the parties to that certain
Amended and Restated Credit Agreement dated as of September 23,
1992 (the "Secured Credit Agreement"), by and among the Borrower,
the Guarantor, Bank of America National Trust and Savings
Association ("Bank of America"), Nations Bank of Texas, N.A.,
Rabobank, Caisse Nationale de Credit Agricole ("Credit Agricole"),
Harris Trust and Savings Bank ("Harris") and Bank of America, as
collateral agent, executed by all of the parties thereto.
SECTION 4.02. Conditions Precedent to All Advances. The
obligation of the Banks to make each Advance (including the initial
Advance) shall be subject to the further conditions precedent that
on the date of such Advance:
(a) the following statements shall be true (and the
receipt by the Borrower of the proceeds of such Advance shall
be deemed to constitute a representation and warranty by the
Borrower that such statements are true on such date):
(i) The representations and warranties contained
in Section 5.01 of this Agreement and in Section 5 of the Guaranty
are correct on and as of the date of such Advance as though made
on and as of such date,
(ii) No event has occurred and is continuing, or
would result from such Advance, which constitutes an Event of
Default (as defined in Section 7.01 hereof) or would constitute an
Event of Default but for the requirement that notice be given or
time elapse or both; and
(iii) Borrower on such date is in compliance with the
compliance criteria set forth in each of the financial covenants
contained in subparagraphs (f), (g), (h) and (i) of Section 6.01
as if the Borrower's compliance therewith was to be measured as of
such date and for such periods ended on such date (rather than on
the measured dates specified therein).
(b) the Banks shall have received such other approvals,
opinions or documents, including guarantees executed by any or all
of Borrower's Affiliates, as the Banks may reasonably request.
SECTION 4.03. Failure to Provide Certificate. Notwith-
standing the conditions precedent in Sections 4.01 and 4.02
requiring the delivery of the certificates set forth therein, any
request by Borrower for an Advance or Letter of Credit will be
deemed to be a representation by Borrower, as to the facts set
forth in each of said Sections whether or not the certificate
required therein is delivered.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
SECTION 5.01. Representations and Warranties of the Borrower.
The Borrower represents and warrants as follows:
(a) The Borrower. The Borrower is a corporation duly
incorporated, validly existing and in good standing under the laws
of the jurisdiction indicated at the beginning of this Agreement.
The Borrower has no subsidiaries which are not a Guarantor, except
Ohse Transportation, Inc., a Kansas corporation, and Hudson Foods
Poland s.p. zo.o., a Polish limited liability company.
(b) The Loan Documents. The execution, delivery and
performance by the Borrower of each Loan Document to which it is
or will be a party are within the Borrower's corporate powers, have
been duly authorized by all necessary corporate action, do not
contravene (i) the Borrower's charter or by-laws or (ii) any law
or any contractual restriction binding on or affecting the
Borrower, and do not result in or require the creation of any
lien, security interest or other charge or encumbrance (other than
pursuant hereto) upon or with respect to any of its properties.
(c) Governmental Approvals. No authorization or
approval or other action by, and no notice to or filing with, any
governmental authority or regulatory body is required for the due
execution, delivery and performance by the Borrower of any Loan
Document to which it is or will be a party.
(d) Enforceability. This Agreement is, and each other
Loan Document to which the Borrower will be a party when delivered
hereunder will be, legal, valid and binding obligations of the
Borrower enforceable against the Borrower in accordance with their
respective terms.
(e) Financial Condition and Operations. The balance
sheets of the Borrower and its subsidiaries as at January 1, 1994,
and the related statements of income and cash flows of the Borrower
and its subsidiaries for the fiscal period then ended, copies of
which have been furnished to the Bank, fairly present the financial
condition of the Borrower and its subsidiaries as at such date and
the results of the operations of the Borrower and its subsidiaries
for the period ended on such date, all in accordance with generally
accepted accounting principles consistently applied, and since
January 1, 1994, there has been no material adverse change in such
condition or operations.
(f) Litigation. There is no pending or threatened
action or proceeding affecting the Borrower or any of its
subsidiaries before any court, governmental agency or arbitrator,
which may materially adversely affect the financial condition or
operations of the Borrower or any subsidiary.
(g) Use of Proceeds of Advances, Etc. (i) No proceeds
of any Committed Advance or Bid Rate Credit will be used to acquire
any security in any transaction which is subject to Sections 13 and
14 of the Securities Exchange Act of 1934; (ii) the Borrower is not
engaged in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of
Regulation U issued by the Board of Governors of the Federal
Reserve System); and (iii) no proceeds of any Committed Advance or
Bid Rate Credit will be used to purchase or carry any margin stock
or to extend credit to others for the purpose of purchasing or
carrying any margin stock; following application of the proceeds
of each Committed Advance or Bid Rate Credit, not more than 25
percent of the value of the assets (either of the Borrower only or
of the Borrower and its subsidiaries on a consolidated basis)
subject to the provisions of Section 6.02(a) will be margin stock
(within the meaning of Regulation U).
(h) ERISA. (i) All members of any Controlled Group have
complied with all applicable minimum funding requirements and all
other applicable and material requirements of ERISA and the Code
applicable to each Plan, and there are no existing conditions that
would give rise to material liability thereunder, (ii) with respect
to each Plan, all members of any Controlled Group have made all
material contributions or payments to or under each Plan required
by law, by the terms of such Plan or the terms of any contract or
agreement, (iii) no Termination Event has occurred nor is
reasonably expected to occur with respect to any Plan, and there
are no unfunded benefit liabilities, as defined in Section
4001(a)(18) of ERISA, with respect to any Plan which pose a risk
of causing a lien to be created on the assets of the Borrower or
any of its subsidiaries or which will result in the occurrence of
a Reportable Event, (iv) no material liability to the PBGC has
been, or is expected to be, incurred by any member of any
Controlled Group, (v) no member of any Controlled Group has been
required to contribute to a Multiemployer Plan or has incurred or
reasonably expects to incur any withdrawal liability under ERISA
to any Multiemployer Plan, and (vi) no prohibited transaction under
ERISA or the Code has occurred with respect to any Plan which could
reasonably be expected to have a material adverse effect on the
condition, financial or otherwise, of any Plan.
(i) Solvency. The Borrower and each of its subsidiaries
is and, after giving effect to the initial Advance, will be
solvent, that the execution, delivery and performance of any of the
Loan Documents to which the Borrower or any of its subsidiaries is
a party does not and will not render such Person insolvent, that
any property remaining with such Person after execution, delivery
and performance of the Loan Documents to which it is a party is not
an unreasonably small capital for the conduct of its business and
that each execution, delivery and performance is not intended to
and will not hinder, delay or defraud any Person to which the
Borrower or any of its subsidiaries was, is or may be liable.
(j) Taxes. The Borrower and each subsidiary has filed
all federal, state and other income tax returns which are required
to be filed and has paid all taxes as shown on said returns, and
all taxes due or payable without returns and all assessments
received to the extent that such taxes or assessments have become
due. All tax liabilities of the Borrower and each subsidiary are
adequately provided for on the books of the Borrower and each
subsidiary (including interest and penalties pertaining thereto to
the extent that the same are estimable). Except as described on
Schedule 5.01(j) attached hereto and incorporated herein by
reference, no income tax liability of a material nature has been
asserted by taxing authorities for taxes in excess of those already
paid, and federal, state and other income tax returns of Borrower
and each subsidiary have been examined and reported on by the
taxing authorities or closed by applicable laws and satisfied for
all years prior to and including the 1987 tax year.
(k) Environmental Matters. Except as disclosed in the
Borrower's Form 10-K Annual Report for its fiscal year ended 1993
and except with respect to matters the effect of which would not
be material and adverse to the properties, business, prospects,
profits or condition (financial or otherwise) of the Borrower or
any of its subsidiaries: (i) neither the Borrower nor any of its
subsidiaries has generated, transported or disposed of any
Hazardous Substance; (ii) neither the Borrower nor any of its
subsidiaries is currently generating, transporting or disposing of
any Hazardous Substance; (iii) neither the Borrower nor any of its
subsidiaries has knowledge, based upon diligent inquiry, that (A)
any of its fixed assets (whether owned, leased or otherwise
directly or indirectly controlled) has been used for the disposal
of or has been contaminated by any Hazardous Substance, or (B) any
of its business operations have contaminated lands or waters of
others with any Hazardous Substance; (iv) neither the Borrower nor
any of its subsidiaries, nor any of their respective assets, are
subject to any liability under Environmental Law nor, to the best
of the Borrower's and each subsidiary's knowledge following
diligent inquiry any threatened liability under any Environmental
Law; (v) neither the Borrower nor any of its subsidiaries has
received any notice of or otherwise learned of any governmental
investigation evaluating whether any remedial action is necessary
to respond to a release or a threatened release of any Hazardous
Substance for which either the Borrower or any of its subsidiaries
is or may be liable; (vi) to the best of the Borrower's and each
subsidiary's knowledge, following diligent inquiry, neither the
Borrower nor any of its subsidiaries is in violation of any
Environmental Law; and (vii) neither the Borrower nor any of its
subsidiaries has failed to obtain any permits or licenses required
by any Environmental Law.
ARTICLE VI
COVENANTS OF THE BORROWER
SECTION 6.01. Affirmative Covenants. So long as any amount
payable hereunder or under the Notes shall remain unpaid or any
Bank shall have any commitment hereunder, the Borrower will, unless
Agent, after obtaining the approval of the Majority Banks, shall
otherwise consent in writing:
(a) Payment of Taxes and Claims. Cause to be paid and
discharged all lawful taxes, assessments or governmental charges
imposed upon the income, profits or property of the Borrower and
its subsidiaries before the same shall be in default, and all
lawful claims for labor, rentals, materials and supplies which, if
unpaid, might become a lien upon Borrower's or its subsidiaries'
property or any part thereof; provided, however, that the Borrower
and its subsidiaries shall not be required to cause to be paid or
discharged any such tax, assessment, governmental charge or claim
so long as the validity thereof shall be contested in good faith
by appropriate proceedings, and adequate book reserves shall be
established with respect thereto, and the Borrower shall, and shall
cause each subsidiary to, pay such tax, charge or claim before any
property subject thereto shall be sold to satisfy a lien.
(b) Compliance with Applicable Laws. Comply, and cause
each of its subsidiaries to comply, with the requirements of all
applicable laws and orders, except where contested in good faith
and by proper proceedings, and obtain any licenses, permits,
franchises or other governmental authorizations necessary to the
ownership of its properties or to the conduct of its business and
those of its subsidiaries.
(c) Preservation of Property. Keep, and cause each of
its subsidiaries to keep, its properties which are useful in their
respective businesses, whether owned in fee or otherwise, or
leased, in good operating condition, ordinary wear and tear
excepted, and comply with, and cause each subsidiary to comply
with, all leases to which it or any subsidiary is a party or under
which it or any subsidiary occupies property so as to prevent any
loss or forfeiture thereunder.
(d) Visitation Rights. At any reasonable time and from
time to time, permit the Agent or any Bank, or any agents or
representatives thereof, to examine and make copies of and
abstracts from the records and books of account of and visit the
properties of, and, upon and during the continuance of an Event of
Default, to do so at the expense of Borrower and any of its
subsidiaries, and to discuss the affairs, finances and accounts of
the Borrower and any of its subsidiaries with any of their
respective officers or directors.
(e) Reporting Requirements. Furnish to the Agent and
each Bank: (i) as soon as available and in any event within 30
days after the end of each month, unaudited consolidated balance
sheets and unaudited consolidated statements of income of the
Borrower and its subsidiaries as of the end of such month certified
by the Chief Financial Officer, Secretary or Treasurer of the
Borrower; (ii) as soon as available and in any event within 90 days
after the end of each fiscal year of the Borrower, a copy of the
audited consolidated financial statements for such year for the
Borrower and its subsidiaries, certified in a manner acceptable to
the Agent by Coopers & Lybrand or other independent public
accountants acceptable to the Agent; (iii) promptly after the
filing or receiving thereof, copies of all reports and notices
which the Borrower or Guarantor files under ERISA with the Internal
Revenue Service or the Pension Benefit Guaranty Corporation or the
U.S. Department of Labor, or which the Borrower or Guarantor
receives therefrom; (iv) as soon as available and in any event
within 45 days after the end of each fiscal quarter, unaudited
consolidated financial statements for such quarter for the Borrower
and its subsidiaries, certified by the Chief Financial Officer or
Secretary/Treasurer of the Borrower, and a compliance certificate
in form and substance satisfactory to Agent, showing the
calculation of each financial covenant as of such quarter-end,
executed by the Chief Financial Officer or Secretary/Treasurer of
Borrower; (v) promptly, upon the occurrence of an Event of Default
or an event that but for the passage of time or the giving of
notice or both would constitute an Event of Default, notice of such
Event of Default or event; (vi) weekly Outstandings Reports in the
form of Exhibit F hereto setting forth the amounts and types of
Advances made and Bid Rate Credits extended by each Bank; (vii)
promptly after the filing or receiving thereof, copies of all
reports and notices which the Borrower or Guarantor files with the
Securities and Exchange Commission or similar state regulatory
body, or which the Borrower or Guarantor receives therefrom; and
(viii) such other information respecting the condition or
operations, financial or otherwise, of the Borrower or the
Guarantor as the Agent or any Bank may from time to time reasonably
request.
(f) Working Capital. Maintain as of the last day of
each fiscal quarter (i) a ratio of current assets to current
liabilities (exclusive of current deferred taxes) of not less than
1.5 to 1.0, and (ii) an excess of current assets over current
liabilities (exclusive of current deferred taxes) of not less than
$60,000,000; and the calculation thereof shall be on a basis which
in all respects is consistent with the provisions of Section 10.04.
(g) Net Worth. Maintain as of the last day of each
fiscal quarter a Tangible Net Worth (as hereinafter defined) of not
less than the sum of (i) $129,000,000, plus (ii) the amount of all
proceeds of any issuance of capital stock of Borrower, plus (iii)
the amount of any Subordinated Debt which is converted into capital
stock of Borrower, plus (iv) in the case of each fiscal quarter
ending on or after October 2, 1994, the Applicable Net Income
Carryover (as hereinafter defined). "Tangible Net Worth" means the
excess of total assets over total liabilities, total assets and
total liabilities each to be determined in accordance with
generally accepted accounting principles consistent with those
applied in the preparation of the financial statements referred to
in Section 6.01(e), excluding, however, from the determination of
total assets (i) goodwill, organizational expenses, research and
development expenses, trademarks, trade names, copyrights,
patents, patent applications, licenses and rights in any thereof,
and other similar intangibles, (ii) treasury stock, (iii)
securities which are not readily marketable, (iv) cash held in a
sinking or other analogous fund established for the purpose of
redemption, retirement or prepayment of capital stock, (v) any
write-up in the book value of any asset resulting from a
revaluation thereof subsequent to the date hereof, and (vi) any
items not included in clauses (i) through (v) above which are
treated as intangibles in conformity with generally accepted
accounting principles. "Applicable Net Income Carryover" at any
time that any determination thereof is to be made means an amount
equal to the sum of (i) sixty percent (60%) of the Borrower's net
income for its fiscal year immediately preceding October 2, 1994,
plus (ii) sixty percent (60%) of the Borrower's net income for each
and every fiscal year ending on or after October 2, 1994 which has
ended on or before the date such determination of Applicable Net
Income Carryover is to be made; provided, however, that in the
event that the Borrower's net income for any fiscal year described
above is less than zero, the Borrower's net income for such fiscal
year shall be deemed to be zero for purposes of calculating
Applicable Net Income Carryover.
(h) Minimum Leverage Ratio. Maintain as of the last day
of each fiscal quarter a Leverage Ratio (as hereinafter defined)
of not more than 0.5 to 1.0. "Leverage Ratio" means for any period
of determination thereof, the quotient (expressed as a ratio) of
(I) the sum of (A) indebtedness with maturities greater than one
year (including all current portions thereof), plus (B)
subordinated debt, divided by (II) the sum of (A) indebtedness with
maturities greater than one year (including all current portions
thereof), plus (B) subordinated debt, plus (C) book equity, plus
(D) long-term deferred taxes attributable to Borrower's prior use
of cash accounting, plus (E) deferred taxes attributable to
Borrower's use of the "farm price" method of accounting for
deferred taxes.
(i) Cash Flow Ratio. Maintain as of the last day of
each fiscal quarter a Cash Flow Coverage Ratio of not less than 1.3
to 1.0 on a rolling eight fiscal quarter basis. "Cash Flow
Coverage Ratio" means for any period of determination thereof, the
quotient (expressed as a ratio) of (I) the sum of (A) earnings
before taxes, plus (B) interest paid, plus (C) lease expenses, plus
(D) depreciation and amortization, divided by (II) the sum of (A)
interest paid, plus (B) lease expenses, plus (C) principal payments
on long term debt and capital leases other than Qualifying Balloon
Payments (as hereinafter defined), plus (D) dividends, purchases
or other acquisitions by the Borrower or any of its subsidiaries
of any stock of the Borrower and distributions of assets to the
Borrower's stockholders as such. "Qualifying Balloon Payments" at
any time that any determination thereof is made means the Balloon
Portion (as hereinafter defined) of the final principal payment due
on the final maturity date of any long term debt or capital lease
having a final maturity date during such fiscal quarter; provided,
however, that no such Balloon Portion shall constitute a Qualifying
Balloon Payment if (a) the Agent determines in good faith that it
is unlikely that the Borrower will be able to refinance the Balloon
Portion when due or within sixty (60) days thereafter with
Qualifying Replacement Financing (as defined below) or (b) the
Agent determines in good faith that the Borrower is not diligently
pursuing reasonable efforts to accomplish a refinancing of the
Balloon Portion when due or within sixty (60) days thereafter with
Qualifying Replacement Financing or (c) more than sixty (60) days
have elapsed since the Balloon Portion became due and the Borrower
did not prior to expiration of such period refinance the Balloon
Portion with Qualifying Replacement Financing. "Balloon Portion"
at any time that any determination thereof is to be made means the
portion of a final principal payment due on the final maturity date
of any long term debt or capital lease which exceeds the average
scheduled pre-maturity annual principal amortization under such
long term debt or capital lease. "Qualified Replacement Financing"
means long term debt or capital lease financing of the Company that
does not (or would not if entered into) result in a Default or an
Event of Default.
(j) Insurance. Maintain, and cause each subsidiary to
maintain, in force with financially sound and reputable insurers,
policies with respect to its property and business against such
casualties and contingencies (including public liability, larceny,
embezzlement or other criminal misappropriation insurance) and in
such amounts as is customary in the case of corporations engaged
in the same or similar lines of business or comparable size and
financial strength.
(k) Environmental Notice and Inspection.
(i) Notify the Agent and the Banks in writing,
promptly upon any executive officer or the Borrower or any of its
subsidiaries learning of any of the following which is reasonably
likely to result in liability in excess of Two Million Dollars
($2,000,000): (A) any Environmental Claim which the Borrower or any
of its subsidiaries receives, including one to take or pay for any
remedial, removal, response, clean-up or other action with respect
to any Hazardous Substances located on any property, whether or not
owned by Borrower or any of its subsidiaries; (B) any notice of any
alleged violation of or knowledge by the Borrower or any of its
subsidiaries of a condition which has a reasonable potential of
resulting in a claim for a violation of any Requirement of Law
involving environmental, health or safety matters; and (C) any
commencement or threatened commencement of any judicial or
administrative proceeding or investigation alleging a violation of
any Requirement of Law involving environmental, health or safety
matters.
(ii) Permit and cause each of its subsidiaries to
permit the Agent, any Bank and any agent or representative thereof
access in accordance with Section 6.01(d), to inspect any
documents, property or operations, and interview any employees,
representatives or agents, of the Borrower or any of its
subsidiaries pertaining to the areas of environmental compliance
hazard or liability.
(iii) Submit and cause each of its subsidiaries to
submit, upon written request of the Agent or any Bank, to the Agent
or such Bank, at reasonable intervals, a report providing an update
of the status of any environmental, health or safety compliance,
hazard or liability issue identified in any notice or report
required pursuant to this Section 6.01(k) and any other
environmental, health or safety compliance obligation, remedial
obligation or liability, that might, individually or in the
aggregate, result in liability in excess of Two Million Dollars
($2,000,000).
(l) Further Assurances. On request of any Bank or the
Agent, promptly correct any defect, error or omission which may be
discovered in the contents of any of the Loan Documents or in the
execution or acknowledgement thereof, and will execute, acknowledge
and deliver such further instruments and do such further acts as
may be necessary or as may be requested by any Bank or the Agent
to carry out more effectively the purposes of this Agreement and
the Loan Documents.
SECTION 6.02. Negative Covenants. So long as any amount
payable hereunder or under the Notes shall remain unpaid or any
Bank shall have any Commitment hereunder, the Borrower will not,
unless Agent, after obtaining the approval of the Majority Banks,
shall otherwise consent in writing:
(a) Liens, Etc. Create or suffer to exist, or permit
any of its subsidiaries to create or suffer to exist, any lien,
security interest or other charge or encumbrance, or any other type
of preferential arrangement, upon or with respect to any of its
properties, whether now owned or hereafter acquired, or assign, or
permit any of its subsidiaries to assign, any right to receive
income, in each case to secure any Indebtedness (as defined below)
of any person or entity, other than (i) those described on Schedule
6.02(a) hereto, and renewals and extensions thereof on the same or
substantially the same terms and conditions (ii) purchase money
liens or purchase money security interests upon or in any fixed
assets acquired or held by the Borrower or any subsidiary in the
ordinary course of business to secure the purchase price of such
fixed assets or to secure indebtedness incurred solely for the
purpose of financing the acquisition of such fixed assets, (iii)
liens or security interests existing on such fixed assets at the
time of their acquisition, (iv) liens and security interests on
previously acquired fixed assets, the fair value of which assets
does not exceed by more than 100% the amount of indebtedness
secured thereby, all as determined by the Agent in its sole, good
faith discretion or (v) obligations for capital and operating
leases of real or personal fixed assets acquired or held by the
Borrower in the ordinary course of business which are secured only
by the fixed assets the subject of the lease, provided, however,
that the aggregate principal amount of the indebtedness secured by
the liens or security interests referred to in clauses (ii), (iii)
and (iv) above plus the aggregate amount of capitalized payment
obligations under the leases referred to in clause (v) above plus
the amount of any increase in the indebtedness referred to in
clause (i) above shall not exceed $25,000,000 at any time
outstanding.
(b) Dividends, Etc. Declare or pay any dividends,
purchase or otherwise acquire for value any of its capital stock
now or hereafter outstanding, or make any distribution of assets
to its stockholders as such, or permit any of its subsidiaries to
purchase or otherwise acquire for value any stock of the Borrower
which in the aggregate exceeds $2,750,000 during any fiscal year.
(c) Lease Obligations. Create or suffer to exist, or
permit any of its subsidiaries to create or suffer to exist, any
obligations for the payment of rent for any property under leases
or agreements to lease, which do or would constitute operating
leases, which in the aggregate have annual rental payments in
excess of 7.5% of Borrower's Net Tangible Assets; provided,
however, that leases for rolling stock shall be excluded from the
foregoing calculation. "Net Tangible Assets" means total assets
less intangibles less current liabilities (exclusive of current
deferred taxes).
(d) Indebtedness, etc. Create, incur, assume or suffer
to exist any indebtedness, liabilities or obligations, whether
matured or unmatured, liquidated or unliquidated, direct or
contingent, joint or several, except: (i) the liabilities of the
Borrower permitted under Section 6.02(a); (ii) liabilities of the
Borrower to the Agent and the Banks hereunder or otherwise; (iii)
short-term indebtedness of the Borrower to parties other than the
Agent and Banks hereunder, provided that such indebtedness shall
at no time exceed $20,000,000.00 in the aggregate; (iv) other
long-term indebtedness, and (v) those liabilities listed on
Schedule 6.02(d) hereto.
(e) Capital Expenditures, etc. Make any capital
expenditures in any one fiscal year in excess of $50,000,000 (such
calculation also to include the gross purchase price of assets or
stock, as the case may be, acquired in connection with any merger,
consolidation, asset acquisition, stock purchase or similar
transaction except for the portion of such gross purchase price
which was paid for by the Borrower solely with shares of the
Borrower's capital stock); provided, however, that the amount of
capital expenditures incurred in fiscal years 1994 and 1995, up to
a combined aggregate amount for such two fiscal year period of
$50,000,000, in connection with Borrower's planned construction of
a new processing facility shall be excluded from the calculation
of this covenant.
(f) Loans, Guarantees, etc. Make any loans or advances
to or investments in any person, or directly or indirectly guaranty
or otherwise assure a creditor against loss in respect of any
indebtedness, obligations or liabilities (contingent or otherwise)
of any person unless any such amounts have been included as
indebtedness in making calculations with respect to each
representation, warranty and covenant herein.
(g) Payment of Subordinated Debt. Make any prepayments
of principal on any existing or future Subordinated Debt of the
Borrower.
(h) Merger and Consolidation.
(i) Directly or indirectly, consolidate with or
merge into any other Person, or permit any other Person to
consolidate with or merge into it, unless (A) Borrower is the
surviving legal entity, (B) immediately upon the consummation of
such consolidation or merger there shall be no Default or Event of
Default and (C) any additional documentation required by the Agent
shall be delivered to the Agent.
(ii) Allow any subsidiary, directly or indirectly,
to consolidate with or merge into any other subsidiary, unless (A)
immediately upon the consummation of such consolidation or merger,
there shall be no Default or Event of Default and (B) any
additional documentation required by the Agent shall be delivered
to the Agent.
(i) Business. Engage, directly or through other
Persons, in any business other than the business now carried on,
and other businesses directly related thereto.
(j) Transactions With Affiliates. Notwithstanding any
other provision of this Agreement, enter into any transaction with
any Affiliate of the Borrower (other than a merger permitted under
Section 6.02(h) hereof) except in the ordinary course of Borrower's
business, and on fair and reasonable terms no less favorable to
Borrower than it would obtain in a comparable arm's length
transaction with a Person not an Affiliate.
(k) Sale of Assets. Sell, lease, transfer, or otherwise
dispose of assets, except (i) in the ordinary course of business
and for full and fair consideration or (ii) assets which Borrower
or its subsidiary determines in good faith are obsolete.
(l) Use of Proceeds. Use the proceeds of any Advances
or Letters of Credit for any purpose other than the financing of
the integrated broiler, turkey and food processing and marketing
operations of Borrower or for general corporate purposes including
acquisitions to the extent permitted under Section 6.02.
(m) Subsidiaries. Form or otherwise acquire any
subsidiary corporation (including subsidiary corporations of the
Borrower), unless (i) the Borrower gives each Bank and the Agent
prior written notice thereof and (ii) such subsidiary executes and
delivers to each Bank and the Agent (A) its guaranty of debt with
respect to this Agreement in form substantially similar to the
Guaranty and (B) such other documents and amendments to the Loan
Documents as the Majority Banks shall require.
(n) Accounting Methods. Change its methods of
accounting, unless required by GAAP.
(o) Fiscal Year End. Change its fiscal year.
(p) Compliance with ERISA. (i) Terminate any Plan so
as to result in any material (in the opinion of the Majority Banks)
liability of the Borrower or any of its subsidiaries to the PBGC,
or (ii) permit to exist any occurrence of any Reportable Event, or
any other event or condition, which presents a material (in the
opinion of the Majority Banks) risk of such a termination by the
PBGC of any Plan.
(q) Restricted Investments. Make any investments
(including loans or other advances to or for the benefit of any
subsidiary of the Borrower) except (i) investments in readily
marketable obligations of the United States of America maturing
within one year from date of purchase, (ii) investments in prime
(by recognized United States financial standards) commercial paper
maturing within one year from date of purchase, (iii) investment
in fully insured domestic certificates of deposit and certificates
of deposit issued by any Bank (provided such Bank's outstanding
long-term debt securities are rated at least A by Standard & Poor's
Corporation or at least A-1 by Moody's Investors Service, Inc.)
maturing within one year, (iv) endorsements of negotiable
instruments for collection in the ordinary course of business, (v)
investments in other comparable prudent investments, including
investments in or issued by any Bank, reported to the Banks monthly
in conjunction with the Borrower's monthly reports required by
Section 6.01(e) (together with a copy of the Borrower's
then-current investment policy) and (vi) investments in the
Borrower's subsidiaries that have complied with the requirements
of Section 6.02(m); provided, however, that this Section 6.02(q)
shall not be deemed to prohibit the Borrower from creating accounts
receivable from any subsidiary of the Borrower as a result of the
sale of inventory in accordance with Section 6.02(j).
ARTICLE VII
EVENTS OF DEFAULT
SECTION 7.01. Events of Default. If any of the following
events ("Events of Default") shall occur and be continuing:
(a) The Borrower shall fail to pay any amount payable
hereunder or under the Notes when due; or
(b) Any representation or warranty made by the Borrower
(or any of its officers) or the Guarantor under or in connection
with any Loan Document shall prove to have been incorrect in any
material respect when made; or
(c) The Borrower shall fail to perform or observe the
covenants in Sections 6.01(a), (e) or (j) hereof and any such
failure shall remain unremedied for 10 days after written notice
thereof shall have been given to the Borrower by the Agent or any
Bank, or the Borrower shall otherwise have acquired knowledge
thereof; or
(d) The Borrower or the Guarantor shall fail to perform
or observe any other term, covenant or agreement contained in any
Loan Document on their respective parts to be performed or
observed; or
(e) The Borrower or any of its subsidiaries shall fail
to pay any indebtedness (excluding indebtedness evidenced by the
Notes) of the Borrower or such subsidiary (as the case may be), or
any interest or premium thereon, when due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise)
and such failure shall continue after the applicable grace period,
if any, specified in the agreement or instrument relating to such
indebtedness; or any other default under any agreement or
instrument relating to any such indebtedness, or any other event,
shall occur and shall continue after the applicable grace period,
if any, specified in such agreement or instrument, if the effect
of such default or event is to accelerate, or to permit the
acceleration of, the maturity of such indebtedness; or any such
indebtedness shall be declared to be due and payable, or required
to be prepaid (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof; or
(f) The Borrower or any of its subsidiaries shall
generally not pay its debts as such debts become due, or shall
admit in writing its inability to pay its debts generally, or shall
make a general assignment for the benefit of creditors; or any
proceeding shall be instituted by or against the Borrower or any
of its subsidiaries seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it
or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an
order for relief or the appointment of a receiver, trustee or other
similar official for it or for any substantial part of its
property, and, in the case of any such proceeding instituted
against it (but not instituted by it) either such proceeding shall
remain undismissed or unstayed for a period of 30 days or any of
the actions sought in such proceeding (including, without
limitation, the entry of an order for relief against it or the
appointment of a receiver, trustee, custodian or other similar
official for it or for any substantial part of its property) shall
occur; or the Borrower or any of its subsidiaries shall take any
corporate action to authorize any of the actions set forth above
in this subsection (e); or
(g) Any judgment or order for the payment of money in
excess of $5,000,000 shall be rendered against the Borrower or any
of its subsidiaries and either (i) enforcement proceedings shall
have been commenced by any creditor upon such judgment or order or
(ii) there shall be any period of 30 consecutive days during which
a stay of enforcement of such judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect; or
(h) Any provision of the Guaranty after delivery thereof
under Section 4.01 shall for any reason cease to be valid and
binding on any Guarantor, or any Guarantor shall so state in
writing; or
(i) James T. Hudson and his immediate family cease to
own of record at least 51% of the aggregate outstanding voting
power of Borrower; or
(j) (I) Any Termination Event with respect to a Plan
shall have occurred, and, thirty days after notice thereof shall
have been given to Borrower by the Agent or any Bank, (A) such
Termination Event (if correctable) shall not have been corrected
and (B) the then present value of such Plan's vested benefits
exceeds the then current value of assets accumulated in such Plan
by more than the amount of $500,000 (or in the case of a
Termination Event involving the withdrawal of a "substantial
employer" (as defined in Section 4001(a)(2) of ERISA), the
withdrawing employer's proportionate share of such excess shall
exceed such amount, or (II) the Borrower or any of its
subsidiaries, as an employer under a Multiemployer Plan, shall have
made a complete or partial withdrawal from such Multiemployer Plan
and the plan sponsor of such Multiemployer Plan shall have notified
such withdrawing employer that such employer has incurred a
withdrawal liability in an annual amount exceeding $100,000;
then, and in any such event, the Agent, with the consent of the
Majority Banks (i) may, by notice to the Borrower, declare the
obligation of the Banks to make Committed Advances to be
terminated, whereupon the same shall forthwith terminate, and (ii)
may, by notice to the Borrower, declare the Notes, all interest
thereon and all other amounts payable under this Agreement to be
forthwith due and payable, whereupon the Notes, all such interest
and all such amounts shall become and be forthwith due and payable,
without presentment, demand, protest or further notice of any kind,
all of which are hereby expressly waived by the Borrower; provided,
however, that in the event of an actual or deemed entry of an order
for relief with respect to the Borrower or any subsidiary under the
Federal Bankruptcy Code, (x) the obligation of the Banks to make
Committed Advances shall automatically be terminated and (y) the
Notes, all such interest and all such amounts shall automatically
become due and payable, without presentment, demand, protest or any
notice of any kind, all of which are hereby expressly waived by the
Borrower.
ARTICLE VIII
DEFINITIONS
SECTION 8.01. Certain Defined Terms. As used in this
Agreement, the following terms shall have the following meanings
(such meanings to be equally applicable to both the singular and
plural forms of the terms defined):
"Acceptance" means a draft drawn on a Bank by the
Borrower and accepted and discounted by such Bank pursuant to
Section 2.03.
"Advances" and "Advance" respectively mean (a) all
advances (including Committed Advances and Bid Rate Advances)
made by the Banks or any single Bank (as the context requires)
to the Borrower pursuant to Article I, and (b) a single such
advance made by any Bank.
"Affiliate" means (i) the Borrower or (ii) the Guarantor
or (iii) any corporation or entity of which either the
Borrower or the Guarantor owns, directly or indirectly through
one or more intermediaries, 10% or more of the outstanding
capital stock of such corporation or entity.
"Agency Fee" shall have the meaning specified in Section
1.02.
"Agency Fee Letter" shall have the meaning specified in
Section 1.02.
"Agent's Depository Account" means the Agent's Account
No. 8026002533 maintained at The Bank of New York in New York
City, ABA Reference No. 021000018, or such other account as
shall be designated by the Agent in a written notice to the
Banks.
"Aggregate Outstanding Liabilities" means, as of any
date, the sum of the then outstanding Advances and Letter of
Credit Liabilities.
"Anticipated Profits" at any time that any determination
thereof is to be made means an amount equal to the excess, if
any, of (i) the amount of interest that the Agent or a Bank,
as the case may be, determines in good faith that it would
have realized on any Advance which was made, or any Advance
that was requested by the Borrower to be made pursuant to a
Notice of Committed Borrowing as if such requested Advance had
been made, and remained outstanding for the duration of the
Interest Period pertaining thereto, over (ii) the Agent's or
a Bank's, as the case may be, cost of obtaining the funds for
any such Advance made, or any such requested Advance, for the
Interest Period pertaining thereto.
"Applicable Net Income Carryover" shall have the meaning
specified in Section 6.01(g).
"Applicable Rate" shall have the meaning specified in
Section 3.02(c).
"Available Commitment" at the time any determination
thereof is to be made means, with respect to any Bank, an
amount equal to the excess, if any, of such (i) Bank's
Commitment over (ii) the Aggregate Outstanding Liabilities
then owing to such Bank.
"Available Commitment Share" when used with reference to
any Bank at the time any determination thereof is to be made
means a fraction, expressed as a percentage, the numerator of
which shall be the amount of such Bank's Available Commitment
then in effect and the denominator of which shall be the
amount of the Available Total Commitment then in effect.
"Available Total Commitment" at the time any
determination thereof is to be made means the aggregate sum
of the Available Commitments of the Banks at such times.
"Balloon Portion" shall have the meaning specified in
Section 6.01(i).
"Bank Obligations" means all obligations of any Loan
Party to the Agent or the Banks, or any of them, howsoever
created, arising or evidenced, whether direct or indirect,
absolute or contingent, joint or several, or now or hereafter
existing, or due or to become due, under or in connection with
this Agreement, the Notes or any other Loan Documents.
"Bank Supplement" shall have the meaning specified in
Section 10.09.
"Base Rate" means the higher of (i) the fluctuating rate
of interest announced publicly by Rabobank in New York, New
York, from time to time, as Rabobank's base rate, or (ii) the
fluctuating rate of interest per annum equal to one-half of
one percent (0.5%) in excess of the rate of interest per annum
at which Rabobank, as a branch of a foreign bank, can acquire
overnight federal funds in the interbank overnight federal
funds market in New York City through brokers of recognized
standing one Business Day prior to such date in the amount of
such Advance. Rabobank may make commercial loans or other
loans at rates of interest at, above, or below its base rate.
"Bid Rate" for any Interest Period for any Advance of any
Bank means an interest rate per annum at all times equal
during such Interest Period to the rate per annum which such
Bank offers to the Borrower in writing from time to time in
response to a request from the Borrower or an interest rate
quotation regarding a specific proposed Bid Rate Advance for
a specific amount to be made on a specific date for a specific
period.
"Bid Rate Advance" shall have the meaning specified in
Section 1.01(b).
"Bid Rate Credits" shall have the meaning specified in
Section 2.03.
"Borrowing Date" means the date on which a Borrowing is,
or is to be, consummated, as the context requires.
"Business Day" means (a) in the case of a Business Day
which relates to fees, a day upon which the Agent is open at
its address specified in or pursuant to the provisions of
Section 10.02 for the purpose of conducting commercial banking
business, (b) in the case of a Business Day which relates to
a LIBOR Rate Advance, a day on which the requirements of
clause (a) of this definition are met and, in addition,
dealings are carried out in the interbank eurodollar market
and banks are open for business in New York, (c) in the case
of a Business Day which relates to a Letter of Credit, a day
on which the relevant issuer and the Agent are each open at
their respective addresses specified in or pursuant to Section
10.02 for purposes of conducting commercial banking business,
and (d) in the case of Bid Credits and Base Rate Advances, a
day on which the requirements of clause (a) of this definition
are met and, in addition, banks are open for business in New
York.
"Cash Flow Coverage Ratio" shall have the meaning
specified in Section 6.01(i).
"Code" means the Internal Revenue Code of 1986, as
amended.
"Commitment" with respect to any Bank means the amount
set forth opposite such Bank's name on the signature page
hereof (or on the signature page of the then most recent Bank
Supplement to which such Bank is a party, if any), as amended
from time to time, as such amount may be reduced from time to
time pursuant to Section 1.01(c).
"Committed Advances" shall have the meaning specified in
Section 1.01(a).
"Committed Borrowing" means a borrowing consisting of
simultaneous Committed Advances from the Banks (or any of
them) pursuant to Section 2.02.
"Controlled Group" means, as to any Person, all members
of a controlled group of corporations and all trades or
businesses (whether or not incorporated) which are under
common control with such Person and which, together with such
Person, are treated as a single employer under Section
4001(a)(14) of ERISA or Section 4.14(b), (c), (m), (n) or (o)
of the Code.
"Default" means any of the events specified in Section
7.01, whether or not there has been satisfied any requirement
in connection with such event for the giving of notice, or the
lapse of time, or the happening of any further condition,
event or act.
"Default Rate" shall have the meaning specified in
Section 3.02(d).
"Environmental Claim" means all claims, however asserted,
by any Governmental Authority or other Person alleging
potential liability for violation of any Environmental Law or
for release or injury to the environment or threat to public
health, personal injury (including sickness, disease or
death), property damage, natural resources, damage, or
otherwise alleging liability for damages, punitive damages,
cleanup costs, removal costs, remedial costs, response costs,
restitution, civil or criminal penalties, injunctive relief,
or other type of relief, resulting from or based upon (a) the
presence, placement, discharge, emission or release (including
intentional and unintentional, negligent and non-negligent,
sudden or non-sudden, accidental or non-accidental placement,
spill, leaks, discharges, emissions or releases) of any
Hazardous Substances at, in or from property, whether or not
owned by the Borrower or any of its subsidiaries, or (b) any
other circumstances forming the basis of any violation, or
alleged violation, of any Environmental Law.
"Environmental Indemnity Matters" shall have the meaning
specified in Section 10.07.
"Environmental Laws" means (i) the Comprehensive
Environmental Response, Compensation and Liability Act of
1980, as amended from time to time, 42 U.S.C. Section 9601 et seq.,
(ii) the Resource Conservation and Recovery Act, as amended
from time to time, 42 U.S.C. Section 6901 et seq., (iii) the Clean
Air Act, as amended from time to time, 42 U.S.C. Section 7401 et
seq., (iv) the Clean Water Act of 1977, as amended from time
to time, 33 U.S.C. Section 1251 et seq., (v) the Toxic Substances
Control Act, as amended from time to time, 15 U.S.C. Section 2601
et seq., (vi) the Hazardous Materials Transportation Act, as
amended from time to time, 49 U.S.C. Section 1801 et seq., and (vii)
all other federal, state and local laws relating to air
pollution, water pollution, noise control and/or the handling,
discharge, disposal or recovery of on-site or off-site
Hazardous Substances, as each of the foregoing may be amended
from time to time.
"ERISA" means the Employee Retirement Income Security Act
of 1974.
"Events of Default" shall have the meaning specified in
Section 7.01.
"Facility Fee" shall have the meaning specified in
Section 1.03.
"GAAP" means generally accepted accounting principles as
in effect from time to time as set forth in the opinions,
statements and pronouncements of the Accounting Principles
Board of the American Institute of Certified Public
Accountants, the Financial Accounting Standards Board and such
other Persons who shall be approved by a significant segment
of the accounting profession and concurred in by the
independent certified public accountants certifying any
audited financial statements of the Borrower.
"Guarantor" shall have the meaning specified in Section
4.01(b), and shall also include any entity which executes a
guaranty as contemplated in Section 6.02(m).
"Guaranty" shall have the meaning specified in Section
4.01(b), and shall also include any guaranty described in
Section 6.02(m).
"Hazardous Substances" means one or more of the following
substances:
(i) those substances included within the
definitions of "hazardous substances", hazardous
materials", "toxic substances", or "solid waste" in any
Environmental Laws;
(ii) those substances listed in the United States
Department of Transportation Table (49 CFR 172.101 and
amendments thereto) or by the Environmental Protection
Agency (or any successor agency) as hazardous substances
(40 CFR Part 302 and amendments thereto);
(iii) such other substances, materials and wastes
which are or become regulated under any Environmental
Laws or regulation, or which are classified as hazardous
or toxic; and
(iv) any material, waste or substance which is
asbestos, explosives or radioactive.
"Indebtedness" with respect to any Person means, without
duplication, (a) all indebtedness of such Person for borrowed
money or for the deferred purchase price of property acquired
by, or services rendered to, such Person, (b) all indebtedness
of such Person created or arising under any conditional sale
or other title retention agreement with respect to any
property acquired by such Person, (c) the present value
determined in accordance with GAAP of all obligations of such
Person under leases which shall have been or should be
recorded as capitalized leases in accordance with GAAP, (d)
all indebtedness or for the deferred purchase price of
property or services secured by any lien upon or in any
property owned by such Person whether or not such Person has
assumed or become liable for the payment of such indebtedness,
(e) indebtedness arising under acceptance facilities, in
connection with surety or other similar bonds, and the undrawn
maximum face amount of all outstanding letters of credit
issued for the account of such Person and, without
duplication, the outstanding amount of all drafts drawn
thereunder, (f) obligations of such Person with respect to
interest rate protection agreements, (g) and (i) all
liabilities in respect of unfunded vested benefits under Plans
and all asserted withdrawal liability of such Person or a
commonly controlled entity to a Multiemployer Plan, as such
term is defined under Section 3(37) of ERISA, and (h) all
direct or indirect guarantees by such Person of indebtedness
described in this definition of any other Person; provided,
that, for purposes of this definition, Trade Debt shall not
be included.
"Interest Period" shall have the meaning specified in
Section 3.02(b).
"Letter of Credit" means each letter of credit, as
defined in the Uniform Commercial Code, issued to, for the
account of, or for the benefit of the Borrower by a Bank or
by another financial institution upon a Bank's guaranty.
"Letter of Credit Liabilities" means, at any time, the
sum of (a) the aggregate maximum amount that thereafter could
be drawn under all Letters of Credit plus (b) all amounts
drawn, but unreimbursed, under Letters of Credit.
"Leverage Ratio" shall have the meaning specified in
Section 6.01(h).
"LIBOR Interest Period" means an Interest Period for a
particular LIBOR Rate Advance.
"LIBOR Office" with respect to any Bank means the office,
branch or affiliate of such bank designated as its address on
the signature pages hereto or such other office(s), branch(es)
or affiliate(s) of such Bank (as designated from time to time
by notice from such Bank to the Borrower and the Agent) which
shall be making or maintaining the LIBOR Rate Advances of such
Bank hereunder.
"LIBOR Rate Advance" means any Advance which bears
interest as a rate determined by reference to the LIBOR Rate.
"LIBOR Rate" for any LIBOR Interest Period for any
Advance means an interest rate per annum equal at all times
during such Interest Period to the quotient of (i) the rate
per annum conclusively determined by Rabobank for such LIBOR
Interest Period at which deposits in U.S. dollars in
immediately available funds are offered, which appear on
Telerate page 3750 as of 11:00 A.M. (London time) on the LIBOR
Business Day that is two (2) London banking days preceding the
first day of such Interest Period, for delivery on the first
day of such LIBOR Interest Period in an amount equal to the
principal amount of the Advance outstanding on the first day
of such LIBOR Interest Period for a period equal to such LIBOR
Interest Period divided by (ii) the remainder of one (1) minus
the applicable LIBOR Reserve Percentage.
"Loan Documents" and "Loan Document" means this
Agreement, the Notes, the Guaranty, the Agency Fee Letter, the
letter agreement described in Section 4.01(i), and all other
documents, instruments, and certificates delivered to the
Agent and/or any Bank by any Loan Party under this Agreement
or in connection herewith, including, without limitation, all
documents, instruments and certificates delivered in
connection with the extension of Bid Rate Credits by any Bank
hereunder and all letters of credit and supporting documents
described in Section 10.16(c) as being deemed to be Loan
Documents.
"Loan Party" shall have the meaning specified in Section
4.01(b).
"LIBOR Reserve Percentage" means, with respect to each
LIBOR Interest Period, a percentage (expressed as a decimal)
equal to the daily average during such LIBOR Interest Period
of the percentages in effect on each day of such LIBOR
Interest Period, as prescribed by the Board of Governors of
the Federal Reserve System (or any successor thereto), for
determining the maximum reserve requirements applicable to
"Eurocurrency Liabilities" pursuant to Regulation D of the
Board of Governors of the Federal Reserve System or any other
then applicable regulation of the Board of Governors which
prescribes reserve requirements applicable to "Eurocurrency
Liabilities" as presently defined in Regulation D.
"Majority Banks" at the time any determination thereof
is to be made and for any specific purpose means a Bank or
Banks having a combined Pro Rata Share aggregating sixty
percent (60%) or more.
"Maximum Rate" shall have the meaning specified in
Section 3.02(c).
"Multiemployer Plan" means, with respect to any Person,
at any time, a "multiemployer plan" within the meaning of
Section 4001(a)(3) of ERISA and to which such Person or any
member of its controlled group is making, or is obligated to
make contributions or has made, or been obligated to make,
contributions.
"Net Tangible Assets" shall have the meaning specified
in Section 6.02(c).
"Net Worth" means the excess of total assets over total
liabilities, total assets and total liabilities each to be
determined in accordance with generally accepted accounting
principles consistent with those applied in the preparation
of the financial statements referred to in Section 6.01(e).
"Notes" shall have the meaning specified in Section 3.01.
"Notice of Committed Borrowing" shall have the meaning
specified in Section 2.02.
"Outstandings Report" means a duly executed and completed
report of the Borrower, substantially in the form of Exhibit
F hereto.
"Person" shall mean any individual or entity.
"PBGC" means the Pension Benefit Guaranty Corporation
established under ERISA.
"Plan" means any plan subject to Title IV of ERISA and
maintained for employees of the Borrower or any of its
subsidiaries, or of any member of a Controlled Group, of which
the Borrower or any of its subsidiaries is a part.
"Pro Rata Share" when used with reference to any Bank
at the time any determination thereof is to be made means a
fraction, expressed as a percentage, the numerator of which
shall be the amount of such Bank's Commitment then in effect
and the denominator of which shall be the Total Commitment
then in effect; provided, that if the respective Commitments
of the Banks, and the Total Commitment, have then been
terminated, the numerator of such fraction shall be the
principal amount of the Aggregate Outstanding Liabilities then
owing to such Bank and the denominator of such fraction shall
be the principal amount of the Aggregate Outstanding
Liabilities then owing to all of the Banks.
"Qualifying Balloon Payments" shall have the meaning
specified in Section 6.01(i).
"Qualifying Replacement Financing" shall have the meaning
specified in Section 6.01(i).
"Reportable Event" means a reportable event as defined
in Section 4043(b) of Title IV of ERISA.
"Request for Bids" shall mean a telephonic request for
one or more Bid Rate Credits which is confirmed in a writing
substantially in the form of Exhibit E.
"Requirement of Law" means, with respect to any Person,
the charter and by-laws or other organizational or governing
documents of such Person, and any law, rule or regulation
(including Environmental Laws and ERISA) or order, decree or
other determination of an arbitrator or a court or other such
governmental authority applicable to or binding upon such
Person or any property or to which such Person or any of its
property is subject.
"Secured Credit Agreement" means that certain Amended and
Restated Credit Agreement, dated as of September 23, 1992, by
and among the Borrower, the Guarantor, and the Banks, and Bank
of America National Trust and Savings Association, as
collateral agent.
"Subordinated Debt" means, without duplication, all
unsecured Indebtedness of the Borrower which is made
subordinate and junior in right of payment to the Bank
Obligations of the Borrower by the inclusion in the instrument
evidencing or creating such Indebtedness or the indenture or
other instrument under which such Indebtedness is issued of
subordination provisions no more favorable to the Persons
extending or purchasing such Indebtedness than the terms of
subordination found in the documents evidencing the
Subordinated Debt outstanding as of the date hereof set forth
on Schedule 8.01 hereof.
"Tangible Net Worth" shall have the meaning specified in
Section 6.01(g).
"Termination Date" means the earlier of June 30, 1997 (or
anniversary thereof as may be determined in accordance with
Section 1.01(d) hereof) or the date of termination in whole
or in part of the Commitment pursuant to Section 1.01(c) or
Section 7.01.
"Termination Event" means (a) a Reportable Event
described in Section 4043 of ERISA and the regulations issued
thereunder (other than a Reportable Event not subject to the
provision for 30-day notice to the PBGC under such
regulations), or (b) the withdrawal of Borrower or any
Subsidiary from a Plan during a plan year in which it was a
"substantial employer" as defined in Section 4001(a)(2) of
ERISA, or (c) the filing of a notice of intent to terminate
a Plan or the treatment of Plan amendment as termination under
Section 4041 of ERISA, or (d) the institution of proceedings
to terminate a Plan by the PBGC, or (e) any other event or
condition which might constitute grounds under Section 4042
of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan.
"Total Commitment" at the time any determination thereof
is to be made means the sum of the then existing Commitments
of the Banks.
"Trade Debt" means trade accounts payable incurred in the
ordinary course of business with an original maturity of not
greater than 180 days (and which are not overdue for more than
30 days).
SECTION 8.02 Construction. Wherever herein the singular
number is used, the same shall include the plural where
appropriate, and words of any gender shall include each other
gender where appropriate. The headings, captions or arrangements
used in any of the Loan Documents are, unless specified otherwise,
for convenience only and shall not be deemed to limit, amplify or
modify the terms of the Loan Documents, nor affect the meaning
thereof.
SECTION 8.03 Currency. All Advances and Bid Rate Credits
shall be denominated in United States Dollars.
ARTICLE IX
THE AGENT
SECTION 9.01. Authorization and Action. Each Bank hereby
appoints and authorizes the Agent to take such action as agent on
its behalf and to exercise such powers under this Agreement as are
delegated to the Agent by the terms hereof, together with such
powers as are reasonably incidental thereto. As to any matters not
expressly provided for by this Agreement (including, without
limitation, enforcement or collection of the Notes), the Agent
shall not be required to exercise any discretion or take any
action, but shall be required to act or to refrain from acting (and
shall be fully protected in so acting or refraining from acting)
upon the instructions of the Majority Banks; provided, however,
that the Agent shall not be required to take any action which
exposes the Agent to personal liability or which is contrary to
this Agreement or applicable law.
SECTION 9.02. Duties and Obligations. Neither the Agent nor
any of its directors, officers, agents, or employees shall be
liable for any action taken or omitted to be taken by it or them
under or in connection with this Agreement except for its or their
own gross negligence or willful misconduct. Without limitation of
the generality of the foregoing, the Agent (i) may treat the payee
of any Note as the holder thereof unless and until the Agent
receives written notice of the assignment thereof signed by such
payee and the Agent receives the written agreement of the assignee
that such assignee is bound hereby as it would have been if it had
been an original Bank party hereto, in each case in form
satisfactory to the Agent, (ii) may consult with legal counsel
(including counsel for the Borrower), independent public
accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken in good faith
by it in accordance with the advice of such counsel, accountants
or experts, and (iii) shall incur no liability under or in respect
of this Agreement by acting upon any notice, consent, certificate
or other instrument or writing (which may be by telegram, cable,
telex or facsimile) believed by it to be genuine and signed or sent
by the proper party or parties or by acting upon any representation
or warranty of the Borrower made or deemed to be made hereunder.
Further, the Agent (A) makes no warranty or representation to any
Bank or shall not be responsible to any Bank for the accuracy or
completeness of any statements, warranties or representations
(whether written or oral) made in or in connection with this
Agreement, (B) shall not have any duty to ascertain or to inquire
as to the performance or observance of any of the terms, covenants
or conditions of this Agreement on the part of the Borrower or to
inspect the property (including the books and records) of the
Borrower, and (C) shall not be responsible to any Bank for the due
execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other instrument or
document furnished pursuant hereto.
SECTION 9.03. Agent and Affiliates. With respect to its
Commitment, the Advances made by it and the Note issued to it, the
Agent shall have the same rights and powers under this Agreement
as the other Banks and may exercise the same as though it were not
the Agent; and the term "Bank" or "Banks" shall, unless otherwise
expressly indicated, include the Agent in its capacity as Bank.
Rabobank and its affiliates may accept deposits from, lend money
to, act as trustee under indentures of, and generally engage in any
kind of business with, the Borrower, all as if Rabobank were not
the Agent hereunder and without any duty to account therefor to the
Banks.
SECTION 9.04. Bank Credit Decision. It is understood and
agreed by each Bank that it has itself been, and will continue to
be, solely responsible for making its own independent appraisal of
and investigations into the financial condition, creditworthiness,
condition, affairs, status and nature of the Borrower.
Accordingly, each Bank confirms to the Agent that such Bank has not
relied, and will not hereafter rely, on the Agent (i) to check or
inquire on its behalf into the adequacy, accuracy or completeness
of any information provided by the Borrower under or in connection
with this Agreement or the transactions herein contemplated
(whether or not such information has been or is hereafter
distributed to such Bank by the Agent), or (ii) to assess or keep
under review on its behalf the financial condition,
creditworthiness, condition, affairs, status or nature of the
Borrower. Each Bank acknowledges that a copy of this Agreement and
a copy of the Exhibits and Schedules hereto have been made
available to it and to its individual legal counsel for review and
such Bank acknowledges that it is satisfied with the form and
substance of this Agreement and the Exhibits and Schedules hereto.
SECTION 9.05. Indemnification. The Banks agree to indemnify
the Agent (to the extent not reimbursed by the Borrower), ratably
according to their respective Pro Rata Shares, from and against any
and all liabilities, obligations, losses, damages, penalties,
actions, judgment, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by, or
asserted against the Agent in any way relating to or arising out
of this Agreement or any action taken or omitted by the Agent under
this Agreement, provided that no Bank shall be liable for any
portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the Agent's gross negligence or
willful misconduct. Without limiting the generality of the
foregoing, each Bank agrees to reimburse the Agent promptly upon
demand for its ratable share of any reasonable out-of-pocket
expenses (including reasonable counsel fees) incurred by the Agent
in connection with the preservation of any rights of the Agent or
the Banks under, or the enforcement of, or legal advice in respect
of rights or responsibilities under, this Agreement, to the extent
that the Agent is not reimbursed for such expenses by the Borrower.
SECTION 9.06. Resignation of Agent. The Agent may resign at
any time by giving written notice thereof to the Banks and the
Borrower. If no successor Agent shall have been appointed by the
Banks, and shall have accepted such appointment, within 30 days
after the retiring Agent's giving of notice of resignation, then
the retiring Agent may, on behalf of the Banks, appoint a successor
Agent, which shall be either a Bank or a bank organized under the
laws of the United States or of any state thereof, or any affiliate
of such bank, and having a combined capital and surplus of at least
$50,000,000, provided, however, that the appointment of any
successor Agent shall require the prior written consent of the
Borrower, which consent shall not be unreasonably withheld, and
that if the Borrower shall not have consented to the appointment
of any of the Banks, then any Bank may be appointed as a successor
Agent in accordance with the terms of this Section 9.06 without the
consent of the Borrower. Upon the acceptance of any appointment
as Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent
shall be discharged from its duties and obligations under this
Agreement. After any retiring Agent's resignation hereunder as
Agent, the provision of this Article IX shall inure to its benefit
as to any actions taken or omitted to be taken by it while it was
Agent under this Agreement.
SECTION 9.07. Exchange of Information. Each Bank and the
Agent shall freely exchange with the other(s) of them any
information relating to the condition, financial or otherwise, of
any Loan Party, and the Borrower hereby consents any and all prior,
present or future such exchanges.
SECTION 9.08. Benefit of the Banks Only. The terms and
provisions of this Article IX are for the sole and exclusive
benefit of the Agent and the Banks, and not for the benefit of the
Borrower, the Guarantors or any other Loan Party.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Amendments, Etc. No amendment or waiver of
any provision of any Loan Document, nor consent to any departure
by the Borrower therefrom, shall in any event be effective unless
the same shall be in writing and signed by the Majority Banks and
then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given; provided,
however, that any modification of, or waiver of compliance with any
of the provisions of, this Section 10.01, the Guaranty, the
definition of Majority Bank or any terms affecting the maturity of
or any other dates for payment or the amounts of any Commitments,
the Advances, or interest on the Advances shall require the written
agreement of the Borrower, the Agent and each of the Banks.
SECTION 10.02. Notices, Etc. All notices and other
communications provided for under any Loan Document shall be in
writing (including telegraphic, telex or cable communication) and
mailed, telegraphed, telexed, cabled or delivered, if to the
Borrower, at its address at 1225 Hudson Road, Rogers, AR 72756,
Attention: Charles B. Jurgensmeyer and Tommy D. Reynolds; and if
to the Agent, at its address at 245 Park Avenue, New York, New York
10167, Attention: Corporate Services Department, and at its
address at 13355 Noel Road, Suite 1000, Dallas, Texas 75240,
Attention: Jess Jarratt; and if to a Bank, at its address or
addresses, as the case may be, set forth on the signature page of
this Agreement or the then most recent Bank Supplement to which
such Bank is a party; or, as to each party, at such other address
as shall be designated by such party in a written notice to the
other party. All such notices and communications shall, when
mailed, telegraphed, telexed or cabled, be effective when deposited
in the mails, delivered to the telegraph company, confirmed by
telex answerback or delivered to the cable company, respectively,
except that notices to the Agent or any Bank pursuant to the
provisions of Article II shall not be effective until received by
the Agent or such Bank, as the case may be. Notwithstanding the
other provisions of this Section 10.02, the Agent may accept oral
borrowing notices pursuant to Article II hereof, provided that the
Agent shall incur no liability to the Borrower in acting on any
such communication that the Agent believes in good faith to have
been given by a person authorized to give such notice on behalf of
the Borrower. Any confirmation sent by the Agent or any Bank to
the Borrower of any borrowing under this Agreement shall, in the
absence of manifest error, be conclusive and binding for all
purposes.
SECTION 10.03. No Waiver; Remedies. No failure on the part
of the Agent or any Bank to exercise, and no delay in exercising,
any right under any Loan Document shall operate as a waiver
thereof; nor shall any single or partial exercise of any right
under any Loan Document preclude any other or further exercise
thereof or the exercise of any other right. The remedies provided
in the Loan Documents are cumulative and not exclusive of any
remedies provided by law.
SECTION 10.04. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with
generally accepted accounting principles consistently applied,
except as otherwise stated herein. The Borrower agrees to furnish
to the Agent and each Bank concurrently with each delivery of the
items referred to in Section 6.01(e)(i) and Section 6.01(e)(ii),
a calculation of the Borrower's compliance or noncompliance with
the covenants contained in Sections 6.01(f), (g), (h) and (i) and
a calculation and reconciliation of the adjustments contemplated
in this Section 10.04, each in form and detail satisfactory to the
Agent, and certified by such person and in such manner as is
prescribed in Sections 6.01(f) (g), (h) and (i), as the case may
be, as to the other items referred to therein.
SECTION 10.05. Costs, Expenses and Taxes. (a) The Borrower
agrees to pay on demand all costs and expenses in connection with
the preparation, execution, delivery, filing, recording and
administration of the Loan Documents and the other documents to be
delivered under the Loan Documents, including, without limitation,
the reasonable fees and out-of-pocket expenses of counsel for the
Agent and each Bank (who may be in-house counsel for the Agent or
such Bank), and local counsel who may be retained by said counsel,
with respect thereto and with respect to advising the Agent and
such Bank as to its rights and responsibilities under the Loan
Documents and all costs and expenses (including reasonable counsel
fees and expenses) in connection with the enforcement of the Loan
Documents and the other documents to be delivered under the Loan
Documents. In addition, the Borrower agrees to pay on demand the
expenses described in Section 6.01(d), subject to the limitations
on amount specified therein. In addition, the Borrower shall pay
any and all stamp and other taxes and fees payable or determined
to be payable in connection with the execution, delivery, filing
and recording of the Loan Documents and the other documents to be
delivered under the Loan Documents, and agrees to hold the Agent
and the Banks harmless from and against any and all liabilities
with respect to or resulting from any delay in paying or omission
to pay such taxes and fees.
(b) If, due to payments made by the Borrower pursuant
to Section 3.01 or due to acceleration of the maturity of the
Advances pursuant to Section 7.01 or due to any other reason, the
Agent or any Bank receives payments of principal of any Advance
other than on the last day of an Interest Period relating to such
Advance, the Borrower shall pay to the Agent or the Bank on demand
any amounts required to compensate the Agent or such Bank, as the
case may be, for any additional losses, costs or expenses which it
may incur as a result of such payment, including, without
limitation, any loss (including loss of Anticipated Profits), cost
or expense incurred by reason of the liquidation or reemployment
of deposits or other funds acquired by the Agent or such Bank, as
the case may be, to fund or maintain such Advance.
SECTION 10.06. Right of Set-off. Upon the occurrence and
during the continuance of any Event of Default the Agent and each
Bank are hereby authorized at any time and from time to time, to
the fullest extent permitted by law, to set off and apply, on a pro
rata basis according to each Bank's Pro Rata Share, any and all
deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by the
Agent and/or such Bank to or for the credit or the account of the
Borrower against any and all of the obligations of the Borrower now
or hereafter existing under any Loan Document, irrespective of
whether or not such Bank shall have made any demand under such Loan
Document and although deposits, indebtedness or such obligations
may be unmatured or contingent; provided, however, that each Bank
and the Agent may first set off and apply such funds to obligations
other than Bank Obligations. The Agent and each Bank, as the case
may be, agrees promptly to notify the Borrower after any such
set-off and application, provided that the failure to give such
notice shall not affect the validity of such set-off and
application. The rights of the Bank under this Section are in
addition to other rights and remedies (including, without
limitation, other rights of set-off) which the Agent and the Banks
may have.
SECTION 10.07 Indemnification. Borrower agrees to, and does
indemnify and hold harmless the Agent and each Bank and their
respective officers, directors, agents, employees, attorneys and
shareholders against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, claims (whether made
or threatened), costs, expenses and disbursements of any kind or
nature whatsoever (including without limitation, the reasonable
fees and expenses of counsel (including the allocated cost of staff
counsel)) which may be imposed on or incurred by the Agent or any
Bank or their respective officers, directors, agents, employees,
attorneys and shareholders in any way relating to, or arising out
of, (a) any of the Loan Documents, (b) the breach of any
representation or warranty as set forth herein regarding
Environmental Laws, (c) the failure of the Borrower or any of its
subsidiaries to perform any obligation required herein or in any
of the Loan Documents to be performed pursuant to Environmental
Laws, or (d) any other act, omission, event or other transaction
contemplated in any of the Loan Documents, to the extent that any
of the same result, directly or indirectly, from any claims
(whether made or threatened) or actions, suits or proceedings
(whether made or threatened) by or on behalf of any Person other
than a Bank. Without limiting the generality of the foregoing,
such indemnity shall extend to any and all costs and expenses
whatsoever incurred by the Agent and each Bank and their respective
officers, directors, agents, employees, attorneys and shareholders
(including, without limitation, the reasonable fees and expenses
of counsel (including the allocated cost of staff counsel)), in
connection with investigating, preparing for or defending against
or providing evidence, producing documents or taking any action
with respect to any such action, claim (whether made or threatened
and whether or not the Agent, any Bank or other indemnified person
is a party to such action or claim), suit, liability, damage or
loss, whether or not resulting in any liability. The Agent and
each Bank may select its own legal counsel in connection with any
matters indemnified against hereunder. The obligation of Borrower
under this Section 10.07 shall survive execution, delivery,
consummation and any termination of this Agreement. Borrower's
obligations under this Section 10.07 are and shall remain absolute
and unconditional, enforceable against each of them whether or not
any Advance is ever made, any Letter of Credit is ever issued, any
Acceptance is ever created or any other obligation ever arises or
any conditions of lending are ever met and without regard to any
act, omission, breach, knowledge or event by, attributable to, or
in any manner involving the Agent or any Bank or their respective
officers, directors, agents, employees, attorneys and shareholders.
Payment by Borrower in respect of a claim made by the Agent or any
Bank or their respective officers, directors, agents, employees,
attorneys and shareholders pursuant to this Section 10.07 shall be
made within thirty days after demand therefor. If and to the
extent that the foregoing undertaking may be unenforceable for any
reason, Borrower hereby agrees to make the maximum contribution to
the payment and satisfaction of each of the foregoing amounts which
is permissible under applicable law.
SECTION 10.08. Severability of Provisions. Any provision of
this Agreement or of any other Loan Document which is prohibited
or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions
hereof or thereof or affecting the validity or unenforceability of
such provision in any other jurisdiction.
SECTION 10.09. Binding Effect; Successors and Assigns;
Participations. (a) This Agreement shall be binding upon and inure
to the benefit of the Borrower, the Agent and the Banks and their
respective successors and assigns, except that the Borrower shall
not have the right to assign its rights hereunder or any interest
herein without the prior written consent of the Agent and each
Bank. Each Bank shall have the right at any time, to assign,
negotiate, hypothecate, or grant participations in this Agreement
or in any of its commitments, Advances, Notes and rights under this
Agreement and any of the other Loan Documents, and in the event of
the exercise of such right shall promptly notify the Agent and the
other Banks thereof; provided, however, that no assignment shall
be made to a third party without the prior consent of the Borrower,
which consent shall not be unreasonably withheld. Each Bank
assigning or transferring any of its commitments, Advances, Notes,
rights and security under this Agreement or any of the other Loan
Documents shall, promptly upon request by the Agent, execute and
deliver such documents and instruments reasonably requested by the
Agent (collectively, a "Bank Supplement") to evidence such
assignment or transfer and to substitute the assignee or transferee
as a Bank on all of the Loan Documents. The Borrower hereby
acknowledges and agrees that any assignment or transfer described
in this Section 10.09 will give rise to a direct obligation of the
Borrower to the buyer, assignee or transferee, as the case may be,
but not a participant, and such person (other than a participant)
shall be considered a Bank and rely on, and possess all rights
under, all opinions, certificates or other instruments delivered
under or in connection with this Agreement or any other Loan
Document. The Borrower shall accord full recognition to any such
assignment or transfer, and all rights and remedies of such Bank
in connection with the interest so assigned shall be as fully
enforceable by such assignee as they were by the assignor Bank
thereof before such assignment. In connection with any proposed
assignment, negotiation, hypothecation or granting of a
participation, the Agent and any such Bank or Banks, as the case
may be, may disclose to the proposed assignee or participant any
information that the Borrower is required to deliver to the Agent
and/or the Banks pursuant to this Agreement or the other Loan
Documents, and the Borrower hereby agrees to cooperate fully with
the Agent and the Banks, as the case may be, in providing any such
information to any proposed assignee or participant. If requested
by the Agent, any assignor or transferor Bank, or any assignee or
transferee, Borrower shall execute and deliver (a) to such assignor
or transferor Bank a promissory note or substitute promissory note,
as the case may be, in substantially the form of Exhibit A, payable
to the order of such assignor or transferor Bank in the principal
amount of the retained Commitment, if any, of such assignee or
transferor Bank in respect of such assignment or transfer and (b)
to such assignee or transferee a promissory note, in substantially
the form of Exhibit A, payable to the order of the assignee or
transferee in the principal amount of the assigned or transferred
Commitment of such assignee or transferee in respect of such
assignment or transfer.
SECTION 10.10. Consent to Jurisdiction. (a) The Borrower
hereby irrevocably submits to the jurisdiction of any New York
State or Federal court sitting in New York City in any action or
proceeding arising out of or relating to this Agreement or any of
the other Loan Documents to which the Borrower is a party, and the
Borrower hereby irrevocably agrees that all claims in respect of
such action or proceeding may be heard and determined in such New
York State court or in such Federal court. The Borrower hereby
irrevocably waives, to the fullest extent it may effectively do so,
the defense of an inconvenient forum to the maintenance of such
action or proceeding. The Borrower irrevocably consents to the
service of copies of the summons and complaint and any other
process which may be served in any such action or proceeding by the
mailing of copies of such process to the Borrower at its address
specified in Section 10.02. The Borrower agrees that a final
judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law.
(b) Nothing in this Section 10.10 shall affect the right
of the Bank to serve legal process in any other manner permitted
by law or affect the right of the Bank to bring any action or
proceeding against the Borrower or its property in the courts of
other jurisdictions.
SECTION 10.11. Governing Law. THIS AGREEMENT AND THE NOTE
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK.
SECTION 10.12. Banks' Obligations Several, Not Joint. The
obligations of the Banks under this Agreement and the other Loan
Documents are several, and are not joint. No Bank or the Agent
shall be responsible or liable in any way for the failure or
refusal of any other Bank to make any Advance to be made by any
other Bank, or for any other obligations of any other Bank.
SECTION 10.13. Execution in Counterparts. This Agreement may
be executed in any number of counterparts, each of which when so
executed shall be deemed to be an original and all of which when
taken together shall constitute but one and the same agreement.
SECTION 10.14. WAIVER OF JURY TRIAL. EACH OF THE BORROWER,
THE AGENT AND THE BANKS HEREBY IRREVOCABLY WAIVES ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO ANY LOAN DOCUMENT TO WHICH IT IS A PARTY OR ANY
INSTRUMENT OR DOCUMENT DELIVERED THEREUNDER.
SECTION 10.15. NO ORAL AGREEMENTS. THIS AGREEMENT, TOGETHER
WITH THE AGREEMENTS, DOCUMENTS AND INSTRUMENTS EXECUTED IN
CONNECTION HEREWITH, REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
Section 10.16. Continuation of Existing Indebtedness,
Liabilities and Obligations. The Borrower, the Guarantor, Bank of
America, NationsBank, Credit Agricole, Harris and Rabobank, and
Bank of America as collateral agent, are parties to a certain
Amended and Restated Credit Agreement dated as of September 23,
1992, as amended from time to time (as so amended, the "Secured
Credit Agreement"), and the other Loan Papers (as defined in the
Secured Credit Agreement), pursuant to which the Borrower and the
Guarantor owe Obligations (as defined in the Secured Credit
Agreement) to Bank of America, NationsBank, Credit Agricole,
Harris, Rabobank and the Collateral Agent (as defined in the
Secured Credit Agreement). Upon the Agent having delivered a
notice to each of the Banks and the Collateral Agent which states
that to the best of the Agent's knowledge (a) the Borrower has
executed and delivered this Agreement to the Agent and the Banks
which are at such time parties to this Agreement and (b) all of the
conditions precedent specified in Section 4.01 and Section 4.02
have been satisfied or waived by the Agent and the Banks:
(i) all of the Obligations and all other amounts then
owing by any Loan Party to any Bank under the Secured Credit
Agreement or any other Loan Papers (including, but not limited
to, all contingent obligations under undrawn letters of
credit), except expenses, fees and other charges and
reimbursements due from any Loan Party to Bank of America in
its capacity as the Collateral Agent under the Secured Credit
Agreement and the other Loan Papers which were due and payable
on or before the date hereof and which have been invoiced by
Bank of America to such Loan Party prior to the date hereof,
shall immediately thereupon constitute (A) Bank Obligations
of the Borrower to such Bank hereunder as if they had been Bid
Rate Credits extended by such Bank to the Borrower under
Section 2.03, and (B) guaranty obligations of any and all
Guarantors under the Guaranty; and
(ii) all liens, security interests and other charges,
encumbrances and other types of preferential arrangements in
or on any of the Collateral (as defined in the Secured Credit
Agreement) which the Collateral Agent has for the benefit of
Bank of America, NationsBank, Credit Agricole, Harris,
Rabobank and/or the Collateral Agent under the Secured Credit
Agreement or any other Loan Papers shall thereupon be deemed
extinguished, released and terminated, and all financing
statements disclosing any of the same shall be deemed
terminated without the necessity of any further act or deed
by the Collateral Agent or any other Person; and
(iii) this Agreement and the other Loan Documents shall
immediately thereupon constitute an amendment and restatement,
but not a novation or extinguishment, of the Secured Credit
Agreement and the other Loan Papers, except that letters of
credit issued by the Banks under the Secured Credit Agreement
which remain outstanding as of the date hereof (which,
together with all supporting documents delivered by any Loan
Party in connection therewith), shall thereafter be deemed to
be Loan Documents under this Agreement and shall not be
terminated or otherwise affected by this subparagraph (iii),
and any indemnification or other provisions of the Secured
Credit Agreement or any other Loan Papers expressly intended
to survive the termination of the Secured Credit Agreement or
such other Loan Papers shall not be terminated or otherwise
affected by this subparagraph (iii).
Each Bank shall mark its books and records contemporaneously with
its receipt of the notice described in this Section 10.16 to
reflect each of the matters described in this Section 10.16.
Notwithstanding anything to the contrary contained in this
Agreement or any other Loan Document, nothing contained in this
Agreement or any other Loan Document is intended to affect, nor
shall it affect, in any way any rights or obligations of any Person
arising under or in connection with (a) that certain Note Purchase
Agreement dated as of August 27, 1992 by and among the Borrower,
Pierre Frozen Foods, Inc., Rabobank, Metropolitan Life Insurance
Company and John Hancock Mutual Life Insurance Company (as amended,
the "Pierre Foods Facility Note Purchase Agreement") or any of the
Transaction Documents (as defined in the Pierre Foods Facility Note
Purchase Agreement) or (b) that certain Term Loan Agreement dated
as of July 18, 1985, by and among the Borrower and Rabobank (as
amended, the "Springfield Facility Loan Agreement"), or any of the
Loan Documents (as defined in the Springfield Facility Loan
Agreement).
[REMAINDER OF THIS PAGE INTENTIONALLY BLANK]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto
duly authorized, as of the date first above written.
HUDSON FOODS, INC.
By:
Name:
Title:
Commitment: $20,000,000.00 COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK B.A.,
"Rabobank Nederland", New York Branch
Address:
By:
Authorized Officer
By:
Authorized Officer
Commitment: $20,000,000.00 BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
Address:
By:
Name:
Title:
Commitment: $20,000,000.00 NATIONSBANK OF TEXAS, N.A.
Address:
By:
Name:
Title:
[A Signature Page of Revolving Credit Agreement dated as
of April , 1994, among Hudson Foods, Inc.,
Bank of America National Trust and Savings Association,
NationsBank of Texas, N. A.,
Caisse Nationale de Credit Agricole, "Credit Agricole",
Harris Trust and Savings Bank and
Cooperatieve Centrale Raiffeisen-Borenleenbank B.A.,
"Rabobank Nederland", New York Branch,
individually and as Agent for the Banks]
<PAGE>
Commitment: $20,000,000.00 CAISSE NATIONALE DE CREDIT
AGRICOLE
Address:
By:
Name:
Title:
Commitment: $20,000,000.00 HARRIS TRUST AND SAVINGS BANK
Address:
By:
Name:
Title:
COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK B.A.,
"Rabobank Nederland", New York
Branch, as Agent for the Banks
Address:
By:
Authorized Officer
By:
Authorized Officer
[A Signature Page of Revolving Credit Agreement dated as
of April , 1994, among Hudson Foods, Inc.,
Bank of America National Trust and Savings Association,
NationsBank of Texas, N. A.,
Caisse Nationale de Credit Agricole, "Credit Agricole",
Harris Trust and Savings Bank and
Cooperatieve Centrale Raiffeisen-Borenleenbank B.A.,
"Rabobank Nederland", New York Branch,
individually and as Agent for the Banks]
<PAGE>
SCHEDULE 5.01(j)
Description of Certain Tax Matters
[See attachment.]
<PAGE>
SCHEDULE 6.02(a)
Description of Certain Liens, Lease Obligations, Etc.
[See attachment.]
<PAGE>
SCHEDULE 6.02(d)
Description of Liabilities
[See attachment.]
<PAGE>
SCHEDULE 8.01
Subordinated Debt
[See attachment.]
<PAGE>
EXHIBIT A
PROMISSORY NOTE
$ Dated: April , 1994
FOR VALUE RECEIVED, the undersigned, HUDSON FOODS, INC. (the
"Borrower"), a Delaware corporation, HEREBY PROMISES TO PAY to the
order of (the "Bank")
on the Termination Date (as defined in the Credit Agreement
referred to below) the principal sum of Dollars ($
) or, if less, the aggregate unpaid principal amount of
all Advances (as defined below) made by the Bank to the Borrower
outstanding on the Termination Date.
The Borrower promises to pay interest on the unpaid principal
amount of each Advance from the date of such Advance until such
principal amount is paid in full, at such interest rates, and
payable at such times, as are specified in the Credit Agreement.
Both principal and interest are payable in lawful money of the
United States of America to the Bank at
in same day funds. All Advances made by the Bank to the Borrower
and all payments made on account of principal hereof shall be
recorded by the Bank and, prior to any transfer hereof, endorsed
on the grid attached hereto which is part of this Promissory Note.
This Promissory Note is one of the Notes referred to in, and is
entitled to the benefits of, the Revolving Credit Agreement dated
as of April 26, 1994 (the "Credit Agreement") between the Borrower
and the Bank, and other commercial, banking and financial
institutions party thereto, and the Guaranty referred to therein
and entered into pursuant thereto. The Credit Agreement, among
other things, (i) provides for the making of advances (the
"Advances") by the Bank to the Borrower from time to time in an
aggregate amount not to exceed at any time outstanding the amount
first above mentioned, and (ii) contains provisions for
acceleration of the maturity hereof upon the happening of certain
stated events and also for prepayments on account of principal
hereof prior to the maturity hereof upon the terms and conditions
therein specified.
THIS PROMISSORY NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
THIS NOTE IS AN AMENDMENT AND RESTATEMENT OF THAT CERTAIN
PROMISSORY NOTE, DATED AS OF , EXECUTED BY THE BORROWER,
AS MAKER, PAYABLE TO THE ORDER OF THE BANK, IN THE STATED PRINCIPAL
AMOUNT OF $ , AND <PAGE>
CONSTITUTES AN AMENDMENT, MODIFICATION AND
RESTATEMENT, BUT NOT AN EXTINGUISHMENT OR NOVATION, OF THE INDEBTEDNESS ON
OBLIGATIONS EVIDENCED THEREBY.
HUDSON FOODS, INC.
By:
Name:
Title:
<PAGE>
ADVANCES, BID RATE CREDITS AND PRINCIPAL PAYMENTS
Date Amount Type Interest Principal Unpaid Notation
Period Repaid Principal Made by
The aggregate unpaid principal amount shown on this grid shall be
rebuttable presumptive evidence of the principal amount owing and
unpaid on this Note. The failure to record the date and amount of
any Advance or Bid Rate Credit on this schedule shall not, however,
limit or otherwise affect the Borrower's obligations under the
Credit Agreement or under this Note to repay the principal amount
of the Advances and Bid Rate Credits together with all interest
accruing thereon, nor shall such failure affect the Borrower's or
any other Loan Party's obligations under any other Loan Document.
<PAGE>
EXHIBIT B
GUARANTY
GUARANTY, dated April , 1994, made by HUDSON FARMS, INC.,
a corporation organized and existing under the laws of Arkansas
(the "Guarantor"), in favor of COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK B.A., "Rabobank Nederland", New York
Branch, individually and as Agent for itself and the Banks (as such
term is defined in the "Credit Agreement" defined below (the
"Agent").
PRELIMINARY STATEMENT. The Agent and one or more of the Banks
have entered into a Revolving Credit Agreement dated as of April
, 1994 (said Agreement, as it may hereafter be amended or
otherwise modified from time to time, being the "Credit Agreement,"
the terms defined therein and not otherwise defined herein being
used herein as therein defined) with Hudson Foods, Inc., a
corporation organized and existing under the laws of Delaware (the
"Borrower"). It is a condition precedent to the making of Advances
and extension of Bid Rate Credits by the Agent and/or the Banks
under the Credit Agreement that the Guarantor shall have executed
and delivered this Guaranty.
NOW, THEREFORE, in consideration of the premises and in order
to induce Agent and/or the Banks to make Advances under the Credit
Agreement, the Guarantor hereby agrees as follows:
SECTION 1. Guaranty. The Guarantor hereby unconditionally
guarantees the punctual payment when due, whether at stated
maturity, by acceleration or otherwise, of all obligations of the
Borrower now or hereafter existing under the Credit Agreement, the
Note and the other Loan Documents to which the Borrower is a party
and any other agreement or instrument relating thereto, whether for
Committed Advances, Bid Rate Credits, principal, interest, fees,
expenses or otherwise (such obligations being the "Obligations"),
and agrees to pay any and all expenses (including counsel fees and
expenses) incurred by the Agent and/or the Banks in enforcing any
rights under this Guaranty.
SECTION 2. Guaranty Absolute. The Guarantor guarantees that
the Obligations will be paid strictly in accordance with the terms
of the Credit Agreement, the Note and the other Loan Documents,
regardless of any law, regulation or order now or hereafter in
effect in any jurisdiction affecting any of such terms or the
rights of the Agent and/or the Banks with respect thereto. The
liability of the Guarantor under this Guaranty shall be absolute
and unconditional irrespective of:
(i) any lack of validity or enforceability of the Credit
Agreement, the Notes, any other Loan Document or any other
agreement or instrument relating thereto;
(ii) any change in the time, manner or place of payment of,
or in any other term of, all or any of the Obligations, or any
other amendment or waiver of or any consent to departure from the
Credit Agreement, the Notes or any other Loan Document and any
other agreement or instrument relating thereto;
(iii) any exchange, release or non-perfection of any
collateral, or any release or amendment or waiver of or consent to
departure from any other guaranty, for all or any of the
Obligations; or
(iv) any other circumstance which might otherwise constitute
a defense available to, or a discharge of, the Borrower or a
guarantor.
This Guaranty shall continue to be effective or be reinstated, as
the case may be, if at any time any payment of any of the
Obligations is rescinded or must otherwise be returned by the Banks
upon the insolvency, bankruptcy or reorganization of the Borrower
or otherwise, all as though such payment had not been made.
SECTION 3. Waiver. The Guarantor hereby waives promptness,
diligence, notice of acceptance and any other notice with respect
to any of the Obligations and this Guaranty and any requirement
that the Agent or any of the Banks protect, secure, perfect or
insure any security interest or lien or any property subject
thereto or exhaust any right or take any action against the
Borrower or any other person or entity or any collateral.
SECTION 4. No Right of Subrogation, Etc. Notwithstanding
anything to the contrary contained herein, the Guarantor shall not
have any right, claim or action, now or hereafter, against the
Borrower arising out of or in connection with this Guaranty or any
other document evidencing the Obligations, including, without
limitation, any right or claim of subrogation, contribution,
reimbursement, exoneration, or indemnity, all such rights and
claims being hereby expressly and absolutely waived. If any amount
shall be paid to the Guarantor on account of Guarantor having made
a payment under this Guaranty at any time when any Obligations
shall not have been finally and indefeasibly paid in full, such
amount shall be held in trust for the benefit of the Agent and the
Banks and shall forthwith be paid to the Agent to be credited and
applied upon the Obligations, whether matured or unmatured, in
accordance with the terms of the Credit Agreement.
SECTION 5. Representations and Warranties. The Guarantor
hereby represents and warrants as follows:
(a) The Guarantor is a corporation duly incorporated,
validly existing and in good standing under the laws of the
jurisdiction indicated at the beginning of this Guaranty.
(b) The execution, delivery and performance by the
Guarantor of this Guaranty are within its corporate powers, have
been duly authorized by all necessary corporate action, and do not
contravene (i) the Guarantor's charter or by-laws or (ii) any law
or any contractual restriction binding on or affecting the
Guarantor.
(c) No authorization or approval or other action by, and
no notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery and
performance by the Guarantor of this Guaranty.
(d) This Guaranty is a legal, valid and binding
obligation of the Guarantor enforceable against it in accordance
with its terms.
(e) The balance sheet for the Borrower and its
subsidiaries (including the Guarantor) as at January 1, 1994, and
the related statement of income of the Borrower and its
subsidiaries (including the Guarantor) for the fiscal period then
ended, copies of which have been furnished to the Bank, fairly
present the financial condition of the Borrower and its
subsidiaries (including the Guarantor) as at such date and the
results of the operations of the Borrower and its subsidiaries
(including the Guarantor) for the period ended on such date, all
in accordance with generally accepted accounting principles
consistently applied, and since January 1, 1994, there has been no
material adverse change in such condition or operations.
(f) There is no pending or threatened action or
proceeding affecting the Guarantor before any court, arbitrator or
governmental agency, which may materially adversely affect the
financial condition or operations of the Guarantor or which
purports to affect the legality, validity or enforceability of this
Guaranty.
SECTION 6. Covenants. The Guarantor covenants and agrees
that, so long as any part of the Obligations shall remain unpaid
or unperformed or the Agent or any of the Banks shall have any
Commitment, the Guarantor will, unless the Agent shall otherwise
consent in writing:
(a) Reporting Requirements. Furnish to the Bank:
(i) as soon as available and in any event within
30 days after the end of each month of each fiscal year of the
Borrower, the balance sheet of the Borrower and its subsidiaries
(including the Guarantor) as of the end of such month and the
statement of income of the Borrower and its subsidiaries (including
the Guarantor) for the period commencing at the end of the previous
fiscal year and ending with the end of such month, certified by the
Chief Financial Officer, Secretary or Treasurer of the Guarantor;
(ii) as soon as available and in any event within
90 days after the end of each fiscal year of the Borrower, a copy
of the financial statements for the Borrower and its subsidiaries
(including the Guarantor) for such year certified in a manner
acceptable to the Agent by Coopers & Lybrand or other independent
public accountants acceptable to the Agent; and
(iii) such other information respecting the condition
or operations, financial or otherwise, of the Guarantor or any of
its subsidiaries as the Agent may from time to time reasonably
request.
SECTION 7. Amendments, Etc. No amendment or waiver of any
provision of this Guaranty nor consent to any departure by the
Guarantor therefrom shall in any event be effective unless the same
shall be in writing and signed by the Agent, and then such waiver
or consent shall be effective only in the specific instance and for
the specific purpose for which given.
SECTION 8. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing
(including telegraphic, telex or cable communication) and mailed,
telegraphed, telexed, cabled or delivered, if to the Guarantor, at
its address at 1225 Hudson Road, Rogers, Arkansas 72756, Attention:
Charles B. Jurgensmeyer and Tommy D. Reynolds, if to the Agent, at
its address specified in the Credit Agreement, or as to each party
at such other address as shall be designated by such party in a
written notice to the other party. All such notices and other
communications shall, when mailed, telegraphed, telexed or cabled,
be effective when deposited in the mails, delivered to the
telegraph company, confirmed by telex answerback or delivered to
the cable company, respectively.
SECTION 9. No Waiver; Remedies. No failure on the part of
the Agent or any of the Banks to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof;
nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of
any other right. The remedies herein provided are cumulative and
not exclusive of any remedies provided by law.
SECTION 10. Right of Set-off. Upon the occurrence and during
the continuance of any Event of Default the Agent and each of the
Banks is hereby authorized at any time and from time to time, to
the fullest extent permitted by law, to set off and apply any and
all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing
by the Agent or such Bank to or for the credit or the account of
the Guarantor against any and all of the obligations of the
Guarantor now or hereafter existing under this Guaranty,
irrespective of whether or not the Agent or such Bank shall have
made any demand under this Guaranty and although such deposits,
indebtedness or obligations may be unmatured or contingent. The
Agent or such Bank, as the case may be, severally (but not jointly)
agrees to notify the Guarantor promptly after any such set-off and
application, provided that the failure to give such notice shall
not affect the validity of such set-off and application. The
rights of the Agent and each of the Banks under this Section are
in addition to other rights and remedies (including, without
limitation, other rights of set-off) which the Agent and each of
the Banks may have.
SECTION 11. Continuing Guaranty; Transfer of Note. This
Guaranty is a continuing guaranty and shall (i) remain in full
force and effect until the later of payment in full of the
Obligations and all other amounts payable under this Guaranty or
the Termination Date, (ii) be binding upon the Guarantor, its
successors and assigns, and (iii) inure to the benefit of and be
enforceable by the Agent and its successors, transferees and
assigns. Without limiting the generality of the foregoing clause
(iii), the Agent and each of the Banks may assign or otherwise
transfer the Notes to any other person or entity, and such other
person or entity shall thereupon become vested with all the rights
in respect thereof granted to the Agent or such Bank, as the case
may be, herein or otherwise.
SECTION 12. Consent to Jurisdiction. (a) The Guarantor
hereby irrevocably submits to the jurisdiction of any New York
State or Federal court sitting in New York City in any action or
proceeding arising out of or relating to this Guaranty, and the
Guarantor hereby irrevocably agrees that all claims in respect of
such action or proceeding may be heard and determined in such New
York State court or in such Federal court. The Guarantor hereby
irrevocably waives, to the fullest extent it may effectively do so,
the defense of an inconvenient forum to the maintenance of such
action or proceeding. The Guarantor irrevocably consents to the
service of copies of the summons and complaint and any other
process which may be served in any such action or proceeding by the
mailing of copies of such process to the Guarantor to its address
specified in Section 8. The Guarantor agrees that a final judgment
in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any
other manner provided by law.
(b) Nothing in this Section 12 shall affect the right
of the Bank to serve legal process in any other manner permitted
by law or affect the right of the Agent to bring any action or
proceeding against the Guarantor or its property in the courts of
any other jurisdictions.
SECTION 13. GOVERNING LAW. THIS GUARANTY SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
SECTION 14. WAIVER OF JURY TRIAL. THE GUARANTOR HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS
GUARANTY.
[REMAINDER OF THIS PAGE INTENTIONALLY BLANK]
<PAGE>
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to
be duly executed and delivered by its officer thereunto duly
authorized as of the date first above written.
HUDSON FARMS, INC.
By:
Name:
Title:
[Signature Page of Guaranty dated as
of April , 1994, executed by Hudson Farms, Inc. in favor
of Cooperatieve Centrale Raiffeisen-Borenleenbank B.A.,
"Rabobank Nederland", New York Branch, individually
and as Agent for the Banks]
<PAGE>
EXHIBIT C
[Date of Initial Advance]
[To the Agent and the Banks]
Re: Hudson Foods, Inc.
Gentlemen:
We have acted as counsel to Hudson Foods, Inc. (the
"Borrower") and Hudson Farms, Inc., an Arkansas corporation (the
"Guarantor"), in connection with the Revolving Credit Agreement
dated as of April 26, 1994 (the "Credit Agreement") between the
Borrower and Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A.,
"Rabobank Nederland", New York Branch, individually and as Agent
for itself and other commercial, banking and financial institutions
(collectively, the "Banks" and individually, a "Bank"). This
opinion is delivered to you pursuant to Section 4.01(f) of the
Credit Agreement. Capitalized terms not otherwise defined herein
are used herein as defined in the Loan Documents (as such term is
defined in the Credit Agreement).
In connection with this opinion, we have (i) investigated such
questions of law, (ii) examined such corporate documents and
records of the Loan Parties, certificates of public officials and
other documents and (iii) received such information from officers
and representatives of the Loan Parties, as we have deemed
necessary or appropriate for the purposes of this opinion. We have
examined, among other documents, the following documents:
(a) the Credit Agreement;
(b) the Notes; and
(c) the Guaranty;
In our examination of the documents referred to above, we have
assumed the due authorization, execution and delivery of the Credit
Agreement by the Bank, the authenticity of all documents submitted
to us as original documents, and the conformity to original
documents of all documents submitted to us as copies thereof. In
our examination of the certificates referred to in clause (ii)
above, we have assumed that all financing statements in which the
Borrower is named as debtor, have been properly filed and indexed
in the appropriate filing offices in the State, that such
certificates are accurate and complete, and that the Bank has no
knowledge of the contents of any other financing statement.
Based upon and subject to the foregoing and the further
qualifications set forth below, we are of the opinion that:
1. The Borrower is a corporation duly incorporated,
validly existing and in good standing under the laws of Delaware.
The Guarantor is a corporation duly incorporated, validly existing
and in good standing under the laws of Arkansas.
2. The execution, delivery and performance by the Loan
Parties of the Loan Documents to which they are parties are within
the Loan Parties' respective powers, have been duly authorized by
all necessary corporate action, and do not contravene (i) the Loan
Parties' respective charters or by-laws or (ii) any law, rule or
regulation applicable to the Loan Parties (including, without
limitation, Regulation X of the Board of Governors of the Federal
Reserve System) or (iii) any contractual or legal restriction
binding on or affecting the Loan Parties. The Loan Documents have
been duly executed and delivered on behalf of the Loan Parties.
3. No authorization, order, license, franchise, consent
or approval or other action by, and no notice to or registration
or filing with, any governmental authority or regulatory body is
required for (i) the due execution, delivery, recordation, filing
or performance by the Loan Parties of any Loan Document to which
they are a party, or (ii) the exercise by the Bank of its rights
under any Loan Document.
4. In any action or proceeding arising out of or
relating to any Loan Document in any court in the State of
Arkansas, such court would recognize and give effect to the
provisions of such Loan Document wherein the parties thereto agree
that such Loan Document shall be governed by, and construed in
accordance with, the law of the State of New York. If the law of
the State of Arkansas were applied to determine the contractual
rights and liabilities created by such Loan Document, such Loan
Document would be the legal, valid and binding obligation of the
Borrower enforceable against the Borrower in accordance with its
terms, subject, however, to (a) the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally and (b) the effect of general
principles of equity (regardless whether such enforceability is
considered in a proceeding in equity or at law).
5. There is no pending or, to the best of our knowledge
after due inquiry, threatened action or proceeding against either
Loan Party before any court, governmental agency or arbitrator
which is likely to have a materially adverse effect upon the
financial condition or operations of either Loan Party.
Very truly yours,
<PAGE>
EXHIBIT D
NOTICE OF COMMITTED BORROWING
Cooperatieve Centrale Raiffisen-Boerenleenbank B.A.
245 Park Avenue
New York, New York 10167
Attention:Corporate Services Department
Re: Revolving Credit Agreement, dated as of April 26, 1994,
as amended or modified and in effect from time to time,
the "Credit Agreement", among HUDSON FOODS, INC. (the
"Borrower"), the various financial institutions party
thereto and Cooperatieve Centrale
Raiffisen-Boerenleenbank B.A. "Rabobank Nederland", New
York Branch, as Agent, terms not otherwise expressly
defined herein shall have the same meanings set forth in
the Credit Agreement.
Gentlemen/Ladies:
A. Loans and Letter of Credit. The Borrower hereby requests
that on , 199 , Committed Advances be made to the
Borrower in the aggregate principal amount of $ and be
comprised of
[ ] Base Rate Loans in the aggregate principal amount of
$ and/or
[ ] LIBOR Rate Loans in the aggregate principal amount of
$ with Interest Period(s) of
[ ] 1 month in the amount of $ ,
[ ] 3 months in the amount of $ ,
B. Representations and Warranties. The Borrower hereby
expressly confirms that the representations and warranties
contained in Section 5.01 of the Credit Agreement and Section 5 of
the Guaranty are correct on and as of the date specified in Section
A above as though made on and as of such date. .
C. Outstandings Report. Attached hereto as Exhibit A is an
Outstandings Report dated the date hereof, which Outstandings
Report is complete, true and accurate in all respects.
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused this
Certificate to be executed and delivered by its duly authorized
officer this th day of , 19 .
HUDSON FOODS, INC.
By:
Name Printed:
Its:
<PAGE>
EXHIBIT E
REQUEST FOR BIDS
Attention:
Facsimile:
Telephone:
This instrument constitutes a Request for Bids under, and as
defined by, the Revolving Credit Agreement dated as of April
, 1994 (as amended or modified and in effect from time to time, the
"Credit Agreement") among the undersigned HUDSON FOODS, INC. (the
"Borrower"), the various financial institutions party thereto, and
COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A., "Rabobank
Nederland, New York Branch, as Agent. Terms not otherwise
expressly defined herein shall have the meanings set forth in the
Credit Agreement.
The Borrower hereby requests Bid Rate Credit(s), subject to
the terms of the Credit Agreement, as follows:
(a) Bid Rate Credit Borrowing Date : , 19 .
(b) Aggregate principal amount of Bid Rate Credits requested:
$ .
(c) Number of Bid Rate Credits requested and principal
amounts thereof: Bid Rate Credits in the amounts
of $ , $ and $ ,
respectively.
(d) Interest Period(s) and its/their maturity date(s):
Principal Amount Maturity Date Interest
Period
$ days
$ days
$ days
(e) Applicable Rate:
(f) Deposit to Account # at
The Borrower hereby expressly confirms that the
representations and warranties contained in Section 5.01 of the
Credit Agreement and Section 5 of the Guaranty are correct on and
as of the date specified in Section (a) above as though made on and
as of such date.
The Borrower agrees that if prior to the time a Bid Rate
Credit is made in relation hereto, any matter certified to,
confirmed, represented or warranted herein by it will not be true
and correct at such time as if then made, it will immediately so
notify the Agent.
<PAGE>
IN WITNESS WHEREOF, the Borrower has caused this Request
for Bids to be executed and delivered by its duly authorized
officer this day of , 19 .
HUDSON FOODS, INC.
By:
Name Printed:
Its:
<PAGE>
EXHIBIT F
OUTSTANDINGS REPORT
Committed Advances OutstandingBid Advances and ICs OutstandingBid Advances
with the Bank Group - Outside the RLOCRabobank NederlandBank of
AmericaNationsBankCredit AgricoleHarris Trust and Savings Bank
Other Banks Outside the Bank Group Not to Exceed $20,000,000<PAGE>
<PAGE>
EXHIBIT G
Form of Letter Agreement Described in Section 4.01(i)
April , 1994
Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A.,
"Rabobank Nederland", New York Branch, individually
and as Agent for certain commercial,
banking and financial institutions under
the Unsecured Credit Agreement referred to below
245 Park Avenue
New York, New York 10167
Attention: Corporate Services Department
Re: Hudson Foods, Inc.
Gentlemen:
The undersigned are parties to that certain Amended and
Restated Credit Agreement dated as of September 23, 1992 (the
"Secured Loan Agreement"), by and among Hudson Foods, Inc. (the
"Company"), Hudson Farms, Inc. ("Farms)", Bank of America
National Trust and Savings Association ("Bank of America"),
NationsBank of Texas, N.A. ("NationsBank"), Cooperatieve Centrale
Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland", New York
Branch ("Rabobank"), Caisse Nationale de Credit Agricole ("Credit
Agricole"), and Harris Trust and Savings Bank ("Harris") and Bank
of America, as collateral agent (the "Collateral Agent").
The Company has advised the undersigned that it desires to
enter into a certain Revolving Credit Agreement (the "Unsecured
Credit Agreement") dated as of April 26, 1994, by and among
Rabobank, Bank of America, NationsBank, Credit Agricole and
Harris, and Rabobank, as agent (the "Unsecured Credit Agreement
Agent"), and that delivery of this letter agreement is a
condition precedent under Section 4.01(i) of the Unsecured Credit
Agreement.
Each of the undersigned severally agrees as follows:
1. Upon the Unsecured Credit Agreement Agent having
delivered a Closing Notice (as hereinafter defined) to
each of the undersigned, all of the Obligations (as
defined in the Secured Loan Agreement) and all other
amounts then owing by the Company and/or Farms to such
person under the Secured Loan Agreement or any other
Loan Papers (including, but not limited to, all
contingent obligations under undrawn letters of
credit), except for expenses, fees and other charges
and reimbursements due from the Company or Farms to the
Collateral Agent (in its capacity as such) under the
Secured Loan Agreement and the other Loan Papers, which
were due and payable on or before April 26, 1994 and
which have been invoiced by the Collateral Agent to the
Company or Farms, as the case may be, prior to such
date, shall immediately thereupon constitute (a) Bank
Obligations (as defined in the Unsecured Credit
Agreement) of the Company owing to such person under
the Unsecured Credit Agreement as if they had been Bid
Rate Credits (as defined in the Unsecured Credit
Agreement) under Section 2.03 of the Unsecured Credit
Agreement, and (b) guarantee obligations of Farms owing
to such person under the Guaranty (as defined in the
Unsecured Credit Agreement). Furthermore, each of the
undersigned shall mark its books and records
contemporaneously with its receipt of such Closing
Notice to reflect the matters described in the
immediately preceding sentence. "Closing Notice" shall
mean a written notice from the Unsecured Credit
Agreement Agent which states that to the best of the
Unsecured Credit Agreement Agent's knowledge (i) the
Company has executed and delivered the Unsecured Credit
Agreement to the Unsecured Credit Agreement Agent and
the commercial, banking and financial institutions
which are at such time parties to the Unsecured Credit
Agreement and (ii) all of the conditions precedent
specified in Section 4.01 and Section 4.02 of the
Unsecured Credit Agreement have been satisfied or
waived by the Unsecured Credit Agreement Agent and the
Banks.
2. Upon the Unsecured Credit Agreement Agent having
delivered a Closing Notice to the Collateral Agent, all
liens, security interests and other charges,
encumbrances and other types of preferential
arrangements in or on any of the Collateral (as defined
in the Secured Loan Agreement) which the Collateral
Agent has for the benefit of the undersigned under the
Secured Loan Agreement or any other Loan Papers shall
thereupon be deemed extinguished, released and
terminated, and all financing statements disclosing the
security interest of any of the same shall be deemed
terminated without the necessity of any further act or
deed by the Collateral Agent or any other person.
Furthermore, the Collateral Agent shall, if requested
to do so by the Unsecured Credit Agreement Agent, duly
execute and return promptly to the Unsecured Credit
Agreement Agent, 245 Park Avenue, New York, New York
10167, Attention: Law Department, Uniform Commercial
Code termination statements, releases and other
documents and instruments which from time to time are
delivered to it by the Unsecured Credit Agreement Agent
to further evidence the same for filing and recording
with all applicable filing and recording offices.
3. Upon the Unsecured Credit Agreement Agent having
delivered the Closing Notices as contemplated in
paragraph 1 and paragraph 2 above, the Unsecured Credit
Agreement and the other Loan Documents (as defined in
the Unsecured Credit Agreement) shall immediately
thereupon constitute an amendment and restatement, but
not a novation or an extinguishment, of the Secured
Loan Agreement and the other Loan Papers, except that
letters of credit issued by any one or more of the
undersigned under the Secured Loan Agreement which
remained outstanding as of April 26, 1994 (which,
together with all supporting documents delivered by the
Company or Farms in connection therewith, shall
thereafter be deemed to be Loan Documents under the
Unsecured Credit Agreement) shall not be terminated or
affected thereby, and any indemnification or other
provisions of the Secured Loan Agreement or any other
Loan Papers expressly intended to survive the
termination of the Secured Loan Agreement or such other
Loan Papers, shall not be terminated or otherwise
affected thereby.
4. Each of the undersigned shall, upon the request of the
Unsecured Credit Agreement Agent from time to time,
execute and deliver, or cause to be executed and
delivered, such further documents and instruments and
do, or cause to be done, such further acts as may be
reasonably requested by the Unsecured Credit Agreement
Agent or necessary or proper to evidence the foregoing
or to carry out more effectively the provisions of this
letter agreement, all at the expense of the party
requesting such documents, instruments or acts.
5. Notwithstanding anything to the contrary contained in
this letter agreement, nothing contained in this letter
agreement is intended to affect, nor shall it affect,
in any way any rights or obligations of any person
arising under or in connection with (a) that certain
Note Purchase Agreement dated as of August 27, 1992 by
and among the Company, Pierre Frozen Foods, Inc.,
Rabobank, Metropolitan Life Insurance Company and John
Hancock Mutual Life Insurance Company (as amended, the
"Pierre Foods Facility Note Purchase Agreement") or any
of the Transaction Documents (as defined in the Pierre
Foods Facility Note Purchase Agreement) and (b) that
certain Term Loan Agreement dated as of July 18, 1985,
by and among the Company and Rabobank (as amended, the
"Springfield Facility Loan Agreement"), or any of the
Loan Documents (as defined in the Springfield Facility
Loan Agreement).
[REMAINDER OF THIS PAGE INTENTIONALLY BLANK]
<PAGE>
This letter agreement may be executed in any number of
counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to
be an original and all of which taken together shall constitute
but one and the same agreement. This letter agreement shall be
governed by, and construed in accordance with, the laws of the
State of New York.
Please call of the Bank of America at ( )
- if you should have any questions regarding this matter.
Very truly yours,
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By:
Name:
Title:
NATIONSBANK OF TEXAS, N.A.
By:
Name:
Title:
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A., "RABOBANK
NEDERLAND", NEW YORK BRANCH
By:
Authorized Signature
By:
Authorized Signature
[A Signature Page of Letter Agreement dated as of
April , 1994, among NationsBank of Texas, N. A.,
Cooperatieve Centrale Raiffeisen-Borenleenbank B.A.,
"Rabobank Nederland", New York Branch,
Caisse Nationale de Credit Agricole, Harris Trust
and Savings Bank and Bank of America National Trust and
Savings Association, individually and as collateral agent]
<PAGE>
CAISSE NATIONALE DE CREDIT AGRICOLE
By:
Name:
Title:
HARRIS TRUST AND SAVINGS BANK
By:
Name:
Title:
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Collateral
Agent under the Secured Loan
Agreement
By:
Name:
Title:
Acknowledged and agreed to
as of , 1994:
HUDSON FOODS, INC.
By:
Name:
Title:
HUDSON FARMS, INC.
By:
Name:
Title:
[A Signature Page of Letter Agreement dated as of
April , 1994, among NationsBank of Texas, N. A.,
Cooperatieve Centrale Raiffeisen-Borenleenbank B.A.,
"Rabobank Nederland", New York Branch,
Caisse Nationale de Credit Agricole, Harris Trust
and Savings Bank and Bank of America National Trust and
Savings Association, individually and as collateral agent]
<PAGE>
PAGE
<PAGE>
EXHIBIT 10B
[CONFORMED COPY]
HUDSON FOODS, INC.
Note Purchase Agreement
Dated as of May 18, 1994
$50,000,000
Fixed Rate Senior Notes
Guarantied By
Hudson Farms, Inc.
<PAGE>
TABLE OF CONTENTS
(Not a Part of the Agreement)
PAGE
1. PURCHASE AND SALE OF NOTES. . . . . . . . . . . . . . . . 1
1.1 Issuance of Notes. . . . . . . . . . . . . . . . . . 1
1.2 Purchase Requests; Rate Quotes.. . . . . . . . . . . 3
1.3 The Closings.. . . . . . . . . . . . . . . . . . . . 6
1.4 Facility Fee.. . . . . . . . . . . . . . . . . . . . 6
1.5 Purchase for Investment; ERISA.. . . . . . . . . . . 7
1.6 Failure to Tender, Failure of Conditions.. . . . . . 8
1.7 Expenses.. . . . . . . . . . . . . . . . . . . . . . 8
2. WARRANTIES AND REPRESENTATIONS. . . . . . . . . . . . . . 9
2.1 Nature of Business.. . . . . . . . . . . . . . . . . 9
2.2 Financial Statements; Indebtedness; Material Adverse
Change.. . . . . . . . . . . . . . . . . . . . . . . 9
2.3 Subsidiaries and Affiliates. . . . . . . . . . . . . 10
2.4 Title to Properties; Leases; Patents, Trademarks,
etc. . . . . . . . . . . . . . . . . . . . . . . . . 10
2.5 Taxes. . . . . . . . . . . . . . . . . . . . . . . . 11
2.6 Pending Litigation.. . . . . . . . . . . . . . . . . 12
2.7 Full Disclosure. . . . . . . . . . . . . . . . . . . 12
2.8 Corporate Organization and Authority.. . . . . . . . 12
2.9 Charter Instruments, Other Agreements, etc.. . . . . 13
2.10 Restrictions on Company, Guarantor and other
Subsidiaries.. . . . . . . . . . . . . . . . . . . . 13
2.11 Compliance with Law. . . . . . . . . . . . . . . . . 14
2.12 ERISA. . . . . . . . . . . . . . . . . . . . . . . . 14
2.13 Certain Laws.. . . . . . . . . . . . . . . . . . . . 15
2.14 Transactions are Legal and Authorized; Obligations
are Enforceable. . . . . . . . . . . . . . . . . . . 16
2.15 Governmental Consent; Certain Laws.. . . . . . . . . 17
2.16 Private Offering of Notes. . . . . . . . . . . . . . 17
2.17 No Defaults; Transactions Prior to Facility Closing
Date, etc. . . . . . . . . . . . . . . . . . . . . . 17
2.18 Use of Proceeds of Notes.. . . . . . . . . . . . . . 18
2.19 Company and Guarantor. . . . . . . . . . . . . . . . 18
2.20 Solvency.. . . . . . . . . . . . . . . . . . . . . . 18
3. CLOSING CONDITIONS. . . . . . . . . . . . . . . . . . . . 19
3.1 Opinions of Counsel. . . . . . . . . . . . . . . . . 19
3.2 Warranties and Representations True. . . . . . . . . 19
3.3 Officers' Certificates.. . . . . . . . . . . . . . . 19
3.4 Good Standing Certificates.. . . . . . . . . . . . . 20
3.5 Legality.. . . . . . . . . . . . . . . . . . . . . . 20
3.6 Private Placement Number.. . . . . . . . . . . . . . 20
3.7 Expenses.. . . . . . . . . . . . . . . . . . . . . . 20
3.8 Compliance with this Agreement.. . . . . . . . . . . 20
3.9 Bank Credit Agreement; Release of Liens. . . . . . . 20
3.10 No Change in Control.. . . . . . . . . . . . . . . . 21
3.11 Proceedings Satisfactory.. . . . . . . . . . . . . . 21
4. PAYMENTS. . . . . . . . . . . . . . . . . . . . . . . . . 21
4.1 Mandatory Principal and Interest Payments. . . . . . 21
4.2 Optional Prepayments.. . . . . . . . . . . . . . . . 21
4.3 Offer to Prepay upon Change in Control.. . . . . . . 22
4.4 Pro Rata Payments. . . . . . . . . . . . . . . . . . 24
4.5 Notation of Notes on Prepayment. . . . . . . . . . . 25
4.6 No Other Optional Prepayments. . . . . . . . . . . . 25
5. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES . . . . . . 25
5.1 Registration of Notes. . . . . . . . . . . . . . . . 25
5.2 Exchange of Notes. . . . . . . . . . . . . . . . . . 25
5.3 Replacement of Notes.. . . . . . . . . . . . . . . . 26
5.4 Issuance Taxes.. . . . . . . . . . . . . . . . . . . 26
5.5 Execution and Delivery of Notes by Guarantor.. . . . 27
6. COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . 27
6.1 Payment of Taxes and Claims. . . . . . . . . . . . . 27
6.2 Maintenance of Properties; Corporate Existence;
etc. . . . . . . . . . . . . . . . . . . . . . . . . 28
6.3 Payment of Notes and Maintenance of Office.. . . . . 29
6.4 Liens. . . . . . . . . . . . . . . . . . . . . . . . 29
6.5 Merger, Consolidation, Transfers of Property,
etc. . . . . . . . . . . . . . . . . . . . . . . . . 31
6.6 Tangible Net Worth.. . . . . . . . . . . . . . . . . 32
6.7 Working Capital; Current Ratio.. . . . . . . . . . . 33
6.8 Limitations on Indebtedness. . . . . . . . . . . . . 34
6.9 Cash Flow Coverage Ratio.. . . . . . . . . . . . . . 36
6.10 Dividends and Prepayments on Subordinated Debt.. . . 37
6.11 Capital Expenditures.. . . . . . . . . . . . . . . . 38
6.12 Operating Lease Rentals. . . . . . . . . . . . . . . 39
6.13 Nature of Business.. . . . . . . . . . . . . . . . . 39
6.14 Transactions with Affiliates.. . . . . . . . . . . . 39
6.15 Guaranties of Subsidiaries.. . . . . . . . . . . . . 39
6.16 Restricted Investments.. . . . . . . . . . . . . . . 40
6.17 ERISA. . . . . . . . . . . . . . . . . . . . . . . . 41
6.18 Private Offering.. . . . . . . . . . . . . . . . . . 42
6.19 Certain Accounting Matters.. . . . . . . . . . . . . 42
7. INFORMATION AS TO COMPANY . . . . . . . . . . . . . . . . 42
7.1 Financial and Business Information.. . . . . . . . . 42
7.2 Officer's Certificates.. . . . . . . . . . . . . . . 46
7.3 Accountants' Certificates. . . . . . . . . . . . . . 46
7.4 Inspection.. . . . . . . . . . . . . . . . . . . . . 47
8. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . 47
8.1 Nature of Events.. . . . . . . . . . . . . . . . . . 47
8.2 Default Remedies.. . . . . . . . . . . . . . . . . . 49
8.3 Annulment of Acceleration of Notes.. . . . . . . . . 51
8.4 Restoration of Note Purchase Facility. . . . . . . . 52
9. INTERPRETATION OF THIS AGREEMENT. . . . . . . . . . . . . 52
9.1 Terms Defined. . . . . . . . . . . . . . . . . . . . 52
9.2 GAAP.. . . . . . . . . . . . . . . . . . . . . . . . 67
9.3 Directly or Indirectly.. . . . . . . . . . . . . . . 67
9.4 Section Headings and Table of Contents and
Construction.. . . . . . . . . . . . . . . . . . . . 67
9.5 Governing Law. . . . . . . . . . . . . . . . . . . . 67
10. GUARANTY AND OTHER RIGHTS AND UNDERTAKINGS. . . . . . . . 68
10.1 Guarantied Obligations . . . . . . . . . . . . . . . 68
10.2 Performance Under This Agreement . . . . . . . . . . 68
10.3 Waivers. . . . . . . . . . . . . . . . . . . . . . . 68
10.4 Certain Waivers of Subrogation, Reimbursement and
Indemnity. . . . . . . . . . . . . . . . . . . . . . 70
10.5 Releases . . . . . . . . . . . . . . . . . . . . . . 70
10.6 Marshaling . . . . . . . . . . . . . . . . . . . . . 71
10.7 Liability. . . . . . . . . . . . . . . . . . . . . . 71
10.8 Primary Obligation . . . . . . . . . . . . . . . . . 71
10.9 Election to Perform Obligations. . . . . . . . . . . 72
10.10 No Election . . . . . . . . . . . . . . . . . . 73
10.11 Severability. . . . . . . . . . . . . . . . . . 73
10.12 Other Enforcement Rights. . . . . . . . . . . . 73
10.13 Delay or Omission; No Waiver. . . . . . . . . . 73
10.14 Restoration of Rights and Remedies. . . . . . . 74
10.15 Cumulative Remedies . . . . . . . . . . . . . . 74
10.16 Survival. . . . . . . . . . . . . . . . . . . . 74
10.17 No Setoff, Counterclaim or Other Deduction. . . 74
10.18 Separate Instruments. . . . . . . . . . . . . . 74
11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . 74
11.1 Communications.. . . . . . . . . . . . . . . . . . . 74
11.2 Reproduction of Documents. . . . . . . . . . . . . . 76
11.3 Survival.. . . . . . . . . . . . . . . . . . . . . . 76
11.4 Successors and Assigns.. . . . . . . . . . . . . . . 76
11.5 Amendment and Waiver.. . . . . . . . . . . . . . . . 77
11.6 Expenses.. . . . . . . . . . . . . . . . . . . . . . 78
11.7 Payments on Notes. . . . . . . . . . . . . . . . . . 79
11.8 Jurisdiction; Service of Process . . . . . . . . . . 79
11.9 Entire Agreement.. . . . . . . . . . . . . . . . . . 80
11.10 Duplicate Originals, Execution in
Counterpart. . . . . . . . . . . . . . . . . . . . . 80
Annex 1 -- Information as to Purchasers
Annex 2 -- Information as to Company and Guarantor
Annex 3 -- Information as to Business Covenants
Exhibit A -- Form of Fixed Rate Senior Note
Exhibit B -- Form of Purchase Request
Exhibit C -- Form of Confirmation of Acceptance
Exhibit D1 -- Form of Closing Opinion of Counsel to the
Company and the Guarantor
Exhibit D2 -- Form of Closing Opinion of Special Counsel to
the Purchasers
Exhibit E1 -- Form of Officer's Certificate -- the Company
Exhibit E2 -- Form of Officer's Certificate -- the Guarantor
Exhibit F1 -- Form of Secretary's Certificate -- the Company
Exhibit F2 -- Form of Secretary's Certificate -- the
Guarantor
Exhibit G -- Form of Bank Credit Agreement
<PAGE>
HUDSON FOODS, INC.
1225 Hudson Road
Rogers, Arkansas 72756
HUDSON FARMS, INC.
1225 Hudson Road
Rogers, Arkansas 72756
NOTE PURCHASE AGREEMENT
$50,000,000
Fixed Rate Senior Notes
Dated as of May 18, 1994
John Hancock Mutual Life Insurance Company
John Hancock Place
200 Clarendon Street
Boston, MA 02117
John Hancock Life Insurance Company of America
John Hancock Place
200 Clarendon Street
Boston, MA 02117
Ladies and Gentlemen:
HUDSON FOODS, INC. (together with its successors and assigns
permitted pursuant to this Agreement, the "Company"), a Delaware
corporation, and HUDSON FARMS, INC. (together with its successors
and assigns permitted pursuant to this Agreement, the "Guarantor"),
an Arkansas corporation, hereby agree with each of you as follows:
1. PURCHASE AND SALE OF NOTES
1 Issuance of Notes.
(a) Issuance of Notes. The Company will authorize the
issuance of up to Fifty Million Dollars ($50,000,000) in
aggregate principal amount of its Fixed Rate Senior Notes (the
"Notes"). The Notes shall be issuable from time to time in
Series as more particularly provided herein. Each Note of
each Series shall
(i) bear interest (computed on the basis of a 360-
day year of twelve 30-day months) on the unpaid principal
balance thereof from the date of such Note at the
Applicable Interest Rate in respect thereof, payable
monthly on the first (1st) day of each calendar month in
each year, as more specifically provided in the schedule
of principal and interest payments with respect to such
Series of Notes attached to each Note as Schedule 1 as
provided herein, until the principal amount thereof shall
become due and payable;
(ii) bear interest, payable on demand, on any
overdue principal (including any overdue prepayment of
principal) and Make-Whole Amount, if any, and (to the
extent permitted by applicable law) on any overdue
installment of interest, at a rate equal to the
Applicable Overdue Payment Interest Rate;
(iii) mature on the Maturity Date as determined
in accordance with Section 1.1(c) hereof; and
(iv) be in the form of Exhibit A hereto.
The term "Notes" as used herein shall include each
Note delivered pursuant to this Agreement and each Note
delivered in substitution or exchange for any such Note
pursuant to Section 5.2 or Section 5.3 of this Agreement.
Each of you are sometimes referred to herein,
individually, as a "Purchaser" and, collectively, as the
"Purchasers."
(b) Purchase and Sale of Notes.
(i) Purchase and Sale of Notes. The Company hereby
agrees to sell to each of you and, subject in all
respects to the terms and conditions herein set forth,
you hereby agree to purchase from the Company, from time
to time in accordance with the terms and provisions
hereof, aggregate principal amounts of Accepted Notes
(not in excess of the then Available Facility Amount)
equal to (x) the aggregate principal amount of such
Accepted Notes multiplied by (y) the Note Purchase
Percentage set forth below your name on Annex 1 hereto,
in each case at a price equal to one hundred percent
(100%) of the principal amount thereof (such agreement
to purchase Notes, subject to such terms and conditions,
is referred to herein as the "Note Purchase Facility").
Such purchases shall be made at one or more closings as
more particularly set forth in Section 1.3 hereof. The
sales of the Notes to each Purchaser hereunder are to be
separate sales.
(ii) Termination of Note Purchase Facility. Your
agreement to purchase the Notes under the Note Purchase
Facility in accordance with Section 1.1(b)(i) hereof
shall terminate on the earlier of
(A) the date on which the Available Facility
Amount is Zero Dollars ($0),
(B) the Facility Termination Date, or
(C) the date on which the Note Purchase
Facility is terminated in accordance with Section
8.2 of this Agreement.
(c) Maturity Date. Each Series of the Notes shall
mature on the first (1st) day of the month immediately
following the tenth (10th) anniversary of the Initial Closing
Date (such date being referred to herein as the "Maturity
Date"). Each Note issued pursuant to the terms and provisions
of this Agreement shall expressly set forth such Maturity
Date.
2 Purchase Requests; Rate Quotes.
(a) Purchase Requests. The Company may from time to
time, prior to the termination of the Note Purchase Facility
in accordance with Section 1.1(b) hereof, make requests for
the purchase of a Series of Notes (each such request, a
"Purchase Request") having an aggregate principal amount of
not less than Ten Million Dollars ($10,000,000) and not more
than the Available Facility Amount at such time. Each
Purchase Request shall be made (i) in writing and signed by
a Senior Officer and delivered to each Purchaser at such
Purchaser's respective address specified on Annex 1 hereto,
or (ii) by telephone by a Senior Officer to the designated
representative of each Purchaser specified on Annex 1 hereto
(accompanied by a written Purchase Request delivered by
facsimile or overnight courier to each Purchaser). Each
Purchase Request shall be deemed received by a Purchaser only
when all information and documents required to be contained
therein or submitted therewith have been actually received by
each of the Purchasers and such information and documents
conform to the requirements of this Agreement. Any Purchase
Request received by any Purchaser on a day which is not a
Purchaser Business Day or after 11:00 a.m., Boston,
Massachusetts time, on a Purchaser Business Day shall be
deemed received on the next succeeding Purchaser Business Day.
(b) Contents of Purchase Requests. Each Purchase
Request shall be in the form of Exhibit B hereto and shall
specify the following:
(i) the aggregate principal amount of the Series
of Notes subject to such Purchase Request (the "Offered
Notes");
(ii) the proposed date of closing the issuance
and sale of such Offered Notes (the "Closing Date"),
which proposed date shall be not less than five (5)
Purchaser Business Days after the date the
information to be provided in a Purchase Request is
actually received by all of the Purchasers and not
more than fifteen (15) Purchaser Business Days
thereafter;
(iii) the schedule of mandatory principal and
interest payments in respect of such Series of Offered
Notes, which schedule shall be
(A) a schedule of level monthly payments of
principal and interest due on the first (1st) day
of each calendar month beginning with the month
immediately following the Closing Date with respect
to such Series of Notes, and
(B) based on an amortization schedule of one
hundred twenty (120) months (with the remaining
outstanding principal amount of such Series of Notes
due and payable on the Maturity Date);
(iv) a description of the proposed use of proceeds
of the Offered Notes (which shall be in accordance with
the Company's representation set forth in Section 2.18
hereof);
(v) the account and depository institution to which
the purchase price for the Offered Notes should be wired
upon the purchase of the Offered Notes; and
(vi) a schedule setting forth any modifications to
the information required to be disclosed on Annex 2
hereto to reflect changes since the Facility Closing
Date, which modifications are necessary to make the
statements contained in Section 2 hereof true and correct
as of the time of such Purchase Request and as of the
Closing Date with respect to such Offered Notes.
Each Purchase Request shall also certify that the
representations and warranties contained in Section 2 hereof
(as may be modified by the additional information disclosed
pursuant to clause (vi) of this Section 1.2(b)) are true and
correct on and as of the date of such Purchase Request and
that there exists no Event of Default or Default at such time.
(c) Rate Quotes; Acceptance of Rate Quote.
(i) Rate Quotes. Not later than two (2) Purchaser
Business Days after receipt of a Purchase Request, as
provided in Section 1.2(a) hereof, the Purchasers shall
collectively provide to the Company, at the address set
forth in Section 11.1 hereof, a single quotation (the
"Rate Quote") of a fixed per annum rate, determined in
accordance with Section 1.2(d) hereof. Such Rate Quote
shall be provided by telephone (promptly confirmed by
telecopier), in each case no earlier than 9:00 a.m. and
no later than 1:00 p.m. Boston, Massachusetts time. The
Rate Quote shall represent the interest rate per annum
payable on the outstanding principal balance of the
Series of Offered Notes subject to such Purchase Request
at which the Purchasers would be willing to purchase such
Offered Notes at one hundred percent (100%) of the
principal amount thereof.
(ii) Acceptance of Rate Quote. If the Company
elects to accept the Rate Quote, the Company shall,
within twenty-four (24) hours of receipt thereof, or
within such shorter time as the Purchasers may specify
to the Company, notify each of the Purchasers of its
acceptance of the Rate Quote, and such notice shall
constitute such acceptance (the "Acceptance Notice").
Upon receipt of such Acceptance Notice, the accepted Rate
Quote shall be deemed to be, and shall be, the Applicable
Interest Rate of the Series of Offered Notes subject to
such Rate Quote and the terms applicable to such Offered
Notes (including, without limitation, the schedule of
principal and interest payments with respect to such
Series of Notes) shall be as specified in the Purchase
Request (such Offered Notes being referred to herein as
"Accepted Notes"). Any Rate Quote as to which the
Purchasers do not receive an Acceptance Notice within the
time period specified in this clause (ii) shall expire
and no purchase or sale of Notes hereunder shall be made
on the basis of such expired Rate Quote.
(iii) Confirmation of Acceptance. Prior to the
close of business on the Purchaser Business Day next
succeeding the date of an Acceptance Notice delivered
pursuant to clause (ii) of this Section 1.2(c), the
Company and each Purchaser will execute a Confirmation
of Acceptance with respect thereto.
(iv) Market Disruption. Notwithstanding the
provisions of clause (i) of this Section 1.2(c),
(A) if any Market Disruption shall have
occurred after delivery of a Purchase Request but
before the issuance of a Rate Quote, the Purchasers
shall not provide a Rate Quote as to such Purchase
Request, and
(B) if the Purchasers shall have provided a
Rate Quote with respect to a Series of Offered Notes
pursuant to clause (i) of this Section 1.2(c) and
thereafter prior to the time each of the Purchasers
shall have received an Acceptance Notice with
respect thereto in accordance with clause (ii) of
this Section 1.2(c), there shall occur a Market
Disruption, such Rate Quote shall expire, and no
purchase or sale of Notes hereunder shall be based
upon such expired Rate Quote. If the Market
Disruption ceases prior to the termination of the
Note Purchase Facility pursuant to Section 1.1(b)
hereof, the Company may again propose the issuance
of such Series of Offered Notes by following the
procedures set forth in this Section 1.2.
(d) Determination of Interest Rates.
(i) Initial Interest Rate Period. Each Rate Quote
furnished by the Purchasers to establish the Applicable
Interest Rate for each Series of Notes offered for sale
to the Purchasers by the Company pursuant to one or more
Purchase Requests received by the Purchasers, in
accordance with Section 1.2(a) hereof, on any Purchaser
Business Day during the Initial Interest Rate Period
shall be a rate equal to
(A) the Initial Treasury Rate, plus
(B) one and sixty-five one hundredths percent
(1.65%) per annum.
(ii) Subsequent Interest Rate Period. Each Rate
Quote furnished by the Purchasers to establish the
Applicable Interest Rate for each Series of Notes offered
for sale to the Purchasers by the Company pursuant to one
or more Purchase Requests received by the Purchasers, in
accordance with Section 1.2(a) hereof, on any Purchaser
Business Day during the Subsequent Interest Rate Period
shall be a rate equal to
(A) the applicable Interpolated Treasury Rate,
plus
(B) the applicable Credit Spread.
3 The Closings.
(a) The Closings. The closing of the issuance and sale
of each Series of Accepted Notes by the Company (each, a
"Closing") will be held on the Closing Date determined in
accordance with Section 1.3(b) hereof. At each Closing, the
Company will deliver to each of you, at the offices of Hebb
& Gitlin, a Professional Corporation, One State Street,
Hartford, Connecticut 06103, one or more Accepted Notes
(registered as set forth on Annex 1 hereto), of the Series and
in the denominations indicated on the Confirmation of
Acceptance relating to the Purchase Request in respect of such
Accepted Notes, in an aggregate principal amount equal to the
aggregate principal amount of such Series of Accepted Notes
multiplied by your respective Note Purchase Percentage, dated
such Closing Date and payable to you or payable as indicated
on Annex 1 hereto, against payment by federal funds wire
transfer in immediately available funds of the purchase price
thereof, as directed by the Company in such Purchase Request.
(b) Determination of Closing Date. Each Closing Date
for each Series of Notes shall be a Purchaser Business Day
that is the later of the day proposed as the Closing Date by
the Company in the Purchase Request relating to such Series
of Notes or the earliest practicable date for closing in
accordance with each Purchaser's then-current closing
practices and procedures and, in any case, within fifteen (15)
Purchaser Business Days from the date of the delivery of the
Purchase Request in respect thereof.
4 Facility Fee.
(a) Facility Fee. As consideration for the Note
Purchase Facility, the Company has paid to the Purchasers the
Facility Fee.
(b) Rebate of Facility Fee. Upon each Closing of
Offered Notes each Purchaser shall pay to the Company, as a
rebate of the Facility Fee, an amount equal to (x) such
Purchaser's respective Note Purchase Percentage multiplied by
(y) the Fee Rebate Amount with respect to such Closing of
Accepted Notes.
(c) Failure to Fund. If the Company shall have
satisfied all of the conditions required to be satisfied by
the terms and provisions of this Agreement (including, without
limitation, the terms and provisions of Section 3 hereof) in
respect of the issuance and sale of any Series of Accepted
Notes, and any Purchaser shall fail to tender the purchase
price for such Accepted Notes at any Closing in accordance
with Section 1.3 hereof, such Purchaser shall, within sixty
(60) days of receipt of a notice from the Company therefor,
pay to the Company an amount equal to (x) such Purchaser's
respective Note Purchase Percentage multiplied by (y) the
aggregate amount of the Facility Fee not previously paid to
the Company pursuant to Section 1.4(b) hereof. Nothing in
this Section 1.4(c) shall operate to relieve any such
Purchaser from any of its obligations hereunder (except with
respect to the repayment of any portion of the Facility Fee
actually repaid pursuant to this Section 1.4(c)) or to waive
any of the Company's rights against such Purchaser. No such
failure by any Purchaser shall impose any obligation on any
other Purchaser to pay any amount specified in this Section
1.4(c).
5 Purchase for Investment; ERISA.
(a) Purchase for Investment. Each of you represent to
the Company that you are purchasing the Notes issued from time
to time pursuant to this Agreement, in the aggregate amounts
provided herein, for your own account for investment and with
no present intention of distributing the Notes or any part
thereof, but without prejudice to your right at all times to:
(i) sell or otherwise dispose of all or any part
of the Notes under a registration statement filed under
the Securities Act, or in a transaction exempt from the
registration requirements of the Securities Act; and
(ii) have control over the disposition of all of
your respective assets to the fullest extent required by
any applicable insurance law.
It is understood that, in making the representations set out
in Section 2.14(a) and Section 2.15(a) of this Agreement, the
Company and the Guarantor are relying, to the extent
applicable, upon your respective representations in the
immediately preceding sentence.
(b) ERISA. Each of you represent and warrant that, with
respect to each source of funds to be used by you to purchase
the Notes on each Closing Date (respectively, the "Source"),
at least one (1) of the following statements is accurate:
(i) the Source is assets of an insurance company
general account and not assets of an insurance company
separate account (within the meaning of Section 3(17) of
ERISA);
(ii) the Source is a "governmental plan" as defined
in Title I, Section 3(32) of ERISA;
(iii) the Source is either (A) an insurance
company pooled separate account, and the purchase is
exempt in accordance with Department of Labor Prohibited
Transaction Exemption 90-1 (issued January 29, 1990), or
(B) a bank collective investment fund, in which case the
purchase is exempt in accordance with Department of Labor
Prohibited Transaction Exemption 91-38 (issued July 12,
1991);
(iv) the Source is an "investment fund" managed by
a qualified professional asset manager" or "QPAM" (as
such terms are defined in Part V of Department of Labor
Prohibited Transaction Exemption 84-14 (issued March 13,
1984)) which QPAM has been identified in writing, and the
purchase is exempt under Department of Labor Prohibited
Transaction Exemption 84-14 provided that no other party
to the transactions described in this Agreement and no
"affiliate" of such other party (as defined in Section
V(c) of Department of Labor Prohibited Transaction
Exemption 84-14) has at the time of such Closing Date,
and has not exercised at any time during the immediately
preceding year, the authority to appoint or terminate
said QPAM as manager of the assets of any "plan"
identified in writing pursuant to this clause (iv) or to
negotiate the terms of said QPAM's management agreement
on behalf of such identified "plans;" or
(v) the Source is one or more "plans," or a
separate account or trust fund comprised of one or more
"plans," each of which has been identified to the Company
in writing pursuant to this clause (v).
As used in this Section 1.5(b), "plan" or "plans" shall
have the meaning set forth in Title I, Section 3(3) of ERISA.
6 Failure to Tender, Failure of Conditions.
If at any Closing the Company fails to tender to any Purchaser
the Notes to be purchased by such Purchaser at such Closing, or if
the conditions specified in Section 3 hereof to be fulfilled at
such Closing have not been fulfilled, such Purchaser may thereupon
elect to
(a) be relieved of all further obligations hereunder,
and
(b) notify the Company that all amounts held by such
Purchaser in respect of the Facility Fee shall be retained by
such Purchaser, notwithstanding the other terms and provisions
hereof, as liquidated damages for such failure and breach of
this Agreement.
Nothing in this Section 1.6 shall operate to relieve the
Company from any of its obligations hereunder or to waive any
Purchaser's respective rights against the Company.
7 Expenses.
(a) Generally. Whether or not the Notes of any Series
are sold, the Company will promptly (and in any event within
thirty (30) days of receiving any statement or invoice
therefor) pay all fees, expenses and costs relating hereto,
including, but not limited to:
(i) the reasonable cost of reproducing this
Agreement, the Notes and the other documents delivered
in connection with each Closing;
(ii) the reasonable fees and disbursements of your
special counsel incurred in connection herewith;
(iii) the reasonable cost of delivering to your
home office or custodian bank, insured to your
satisfaction, the Notes purchased by you at each Closing;
(iv) the reasonable fees, expenses and costs
incurred in complying with each of the conditions to
closing set forth in Section 3 hereof; and
(v) the cost of obtaining private placement numbers
for each Series of Notes.
To the extent any Purchaser shall have willfully failed
to purchase Notes when obligated to do so under the terms of
this Agreement, the Company shall be relieved of its
obligations to make such payments for the benefit of such
Purchaser in respect of the Closing at which such failure
occurred.
(b) Counsel. Without limiting the generality of the
foregoing, it is agreed and understood that the Company will
pay, at each Closing, the statement for reasonable fees and
disbursements of your special counsel presented at such
Closing and the Company will also pay, upon receipt of any
statement therefor, each additional statement for reasonable
fees and disbursements of your special counsel rendered after
each such Closing in connection with the issuance of the Notes
or the matters referred to in Section 1.7(a) hereof.
(c) Survival. The obligations of the Company under this
Section 1.7, Section 8.2(e) and Section 11.6 of this Agreement
shall survive the payment of the Notes and the termination
hereof.
2. WARRANTIES AND REPRESENTATIONS
To induce each of you to enter into this Agreement and to
purchase the Notes from time to time in the amounts provided
herein, each of the Company and the Guarantor warrants and
represents, as of the Facility Closing Date, and as of each Closing
Date, as follows:
1 Nature of Business.
The Most Recent 10-K (a copy of which previously has been
delivered to each of you), correctly describes the general nature
of the business and principal Properties of the Company, the
Guarantor and the other Subsidiaries as of the Facility Closing
Date and as of such Closing Date.
2 Financial Statements; Indebtedness; Material Adverse
Change.
(a) Financial Statements. The Company has provided each
of you with its financial statements described in Part 2.2(a)
of Annex 2 hereto and, as applicable, each of the financial
statements which shall have been required to be delivered to
you pursuant to Section 7.1(a) and Section 7.1(b) hereof on
or before such Closing Date. Such financial statements have
been prepared in accordance with GAAP consistently applied,
and present fairly, in all material respects, the financial
position of the Company and its consolidated subsidiaries as
of such dates and the results of their operations and cash
flows for such periods. All such financial statements include
the accounts of all subsidiaries of the Company for the
respective periods during which a subsidiary relationship has
existed.
(b) Indebtedness. Part 2.2(b) of Annex 2 hereto lists
all Indebtedness of the Company, the Guarantor and the other
Subsidiaries as of the Facility Closing Date and as of such
Closing Date, and provides the following information with
respect to each item of such Indebtedness:
(i) the holder thereof,
(ii) the outstanding amount,
(iii) the portion which is classified as current
under GAAP, and
(iv) the collateral securing such Indebtedness, if
any.
(c) Material Adverse Change. Since October 2, 1993,
there has been no change in the business, prospects, profits,
Properties or condition (financial or otherwise) of the
Company, the Guarantor or any of the other Subsidiaries,
except changes in the ordinary course of business that, in the
aggregate for all such changes, could not reasonably be
expected to have a Material Adverse Effect.
(d) Other Financial Information. All statements or
summaries of historical and pro forma financial condition and
performance of the Company and the Subsidiaries included in
the Offering Proposal have been in all material respects
prepared in accordance with GAAP, unless otherwise expressly
noted therein. All assumptions and estimates upon which any
statements of pro forma financial condition or performance
have been based are set forth in the Offering Proposal and are
reasonable in light of the circumstances existing at the time
such assumptions and estimates were made, based on the best
information available to management of the Company and the
Subsidiaries at the time of the preparation thereof. As of
the Facility Closing Date and such Closing Date, and in light
of the circumstances existing on each such date, such
assumptions continue to be reasonable, based on the best
information available to the management of the Company and the
Subsidiaries.
3 Subsidiaries and Affiliates.
Part 2.3 of Annex 2 hereto sets forth:
(a) the name of each of the Subsidiaries, its
jurisdiction of incorporation and the percentage of its Voting
Stock owned by the Company and each other Subsidiary, and
(b) a description of the Affiliates (other than
individuals) and the nature of their affiliation.
Each of the Company and the Subsidiaries has good and
marketable title to all of the shares it purports to own of the
stock of each Subsidiary, free and clear in each case of any Lien.
All such shares have been duly issued and are fully paid and
nonassessable.
4 Title to Properties; Leases; Patents, Trademarks, etc.
(a) Each of the Company, the Guarantor and the other
Subsidiaries has good and marketable title to all of the real
Property, and good title to all of the other Property,
reflected in the most recent balance sheet referred to in
Section 2.2(a) hereof (except as sold or otherwise disposed
of in the ordinary course of business), except where the
failure to have such good and marketable title (i) is
immaterial to such financial statements, and (ii) could not
reasonably be expected to have a Material Adverse Effect.
All such Property is free from Liens not permitted by Section
6.4 hereof.
(b) Each of the Company, the Guarantor and the other
Subsidiaries has complied with all material obligations under
all leases to which it is a party, except where the failure
to so comply could not reasonably be expected to have a
Material Adverse Effect. All such leases are in full force
and effect and each of the Company, the Guarantor and the
other Subsidiaries enjoys peaceful and undisturbed possession
under all such leases.
(c) Each of the Company, the Guarantor and the other
Subsidiaries owns, possesses or has the right to use all of
the patents, trademarks, service marks, trade names,
copyrights and licenses, and rights with respect thereto,
necessary for the present and currently planned future conduct
of its business, without any known conflict with the rights
of others, except for such failures to own, possess, or have
the right to use, that, in the aggregate for all such
failures, could not reasonably be expected to have a Material
Adverse Effect.
5 Taxes.
(a) Returns Filed; Taxes Paid.
(i) All tax returns required to be filed by each
of the Company, the Guarantor and each other Subsidiary
and any other Person with which the Company, the
Guarantor or any other Subsidiary files or has filed a
consolidated return in any jurisdiction have been filed
on a timely basis, and all taxes, assessments, fees and
other governmental charges upon each of the Company, the
Guarantor, such other Subsidiary and any such Person, and
upon any of their respective Properties, income or
franchises, that are due and payable have been paid,
except for such tax returns and such tax payments which
are being contested in good faith and which could not,
in the aggregate for all such tax returns and payments,
reasonably be expected to have a Material Adverse Effect.
(ii) All liabilities of each of the Company, the
Guarantor, the other Subsidiaries and the other Persons
referred to in the preceding clause (i) with respect to
federal income taxes have been finally determined except
for the fiscal years set forth in Part 2.5(a) of Annex
2 hereto, the only years not closed by the completion of
an audit or the expiration of the statute of limitations.
(b) Book Provisions Adequate.
(i) The amount of the liability for taxes reflected
in each of the balance sheets referred to in Section
2.2(a) hereof is in each case an adequate provision for
taxes as of the dates of such balance sheets (including,
without limitation, any payment due pursuant to any tax
sharing agreement) as are or may become payable by any
one or more of the Company and the other Persons
consolidated with the Company in such financial
statements in respect of all tax periods ending on or
prior to such dates.
(ii) The Company does not know of any proposed
additional tax assessment against it or any such Person
that is not reflected in full in the most recent balance
sheet referred to in Section 2.2(a) hereof.
6 Pending Litigation.
(a) There are no proceedings, actions or investigations
pending or, to the knowledge of the Company or the Guarantor,
threatened against or affecting the Company, the Guarantor or
any other Subsidiary in any court or before any Governmental
Authority or arbitration board or tribunal that, in the
aggregate for all such proceedings, actions and
investigations, could reasonably be expected to have a
Material Adverse Effect.
(b) Neither the Company, the Guarantor nor any other
Subsidiary is in default with respect to any judgment, order,
writ, injunction or decree of any court, Governmental
Authority, arbitration board or tribunal that, in the
aggregate for all such defaults, could reasonably be expected
to have a Material Adverse Effect.
7 Full Disclosure.
The financial statements referred to in Section 2.2(a) hereof
do not, nor does this Agreement, the Most Recent 10-K, any
information delivered to you pursuant to Section 7.1 hereof or any
statement furnished by or on behalf of the Company to each of you
in connection with the negotiation or any closing of any sale of
the Notes, contain any untrue statement of a material fact or omit
a material fact necessary to make the statements contained therein
and herein not misleading. There is no fact that the Company has
not disclosed to each of you in writing that has had or, so far as
the Company can now reasonably foresee, could reasonably be
expected to have a Material Adverse Effect.
8 Corporate Organization and Authority.
Each of the Company, the Guarantor and the other Subsidiaries:
(a) is a corporation duly incorporated, validly existing
and in good standing under the laws of its jurisdiction of
incorporation;
(b) has all legal and corporate power and authority to
own and operate its Properties and to carry on its business
as now conducted and as presently proposed to be conducted;
(c) has all licenses, certificates, permits, franchises
and other governmental authorizations necessary to own and
operate its Properties and to carry on its business as now
conducted and as presently proposed to be conducted, except
where the failure to have such licenses, certificates,
permits, franchises and other governmental authorizations, in
the aggregate for all such failures, could not reasonably be
expected to have a Material Adverse Effect; and
(d) has duly qualified or has been duly licensed, and
is authorized to do business and is in good standing, as a
foreign corporation, in each state (each of which states is
listed in Part 2.8(d) of Annex 2 hereto) where the failure to
be so qualified or licensed and authorized and in good
standing, in the aggregate for all such failures, could
reasonably be expected to have a Material Adverse Effect.
9 Charter Instruments, Other Agreements, etc.
(a) Charter Instruments. Neither the Company, the
Guarantor nor any other Subsidiary is in violation in any
respect of any term of any charter instrument or bylaw.
(b) Agreements Relating to Indebtedness. Neither the
Company, the Guarantor nor any other Subsidiary is in
violation of any term in, and no default or event of default
exists under, any agreement or other instrument to which it
is a party or by which it or any of its Properties may be
bound relating to, or providing the terms of, any Indebtedness
specified in Part 2.2(b) of Annex 2 hereto having a principal
or stated amount equal to or in excess of Two Hundred Fifty
Thousand Dollars ($250,000).
(c) Other Agreements. Neither the Company, the
Guarantor nor any other Subsidiary is in violation of any term
in, and no default or event of default exists under, any
agreement or other instrument to which it is a party or by
which it or any of its Properties may be bound (other than the
agreements and other instruments specified in clause (b) of
this Section 2.9), which, in the aggregate for all such
violations, could reasonably be expected to have a Material
Adverse Effect.
10 Restrictions on Company, Guarantor and other
Subsidiaries.
Neither the Company, the Guarantor nor any other Subsidiary:
(a) is a party to any contract or agreement, or subject
to any charter or other corporate restriction that, in the
aggregate for all such contracts, agreements, charters and
corporate restrictions, could reasonably be expected to have
a Material Adverse Effect;
(b) is a party to any contract or agreement that
restricts the right or ability of such corporation to incur
Indebtedness, other than this Agreement and the agreements
listed in Part 2.10(b) of Annex 2 hereto, none of which
restricts the issuance and sale of the Notes or the
performance by the Company of its obligations under this
Agreement or under the Notes; or
(c) has agreed or consented to cause or permit in the
future (upon the happening of a contingency or otherwise) any
of its Property, whether now owned or hereafter acquired, to
be subject to a Lien not permitted by Section 6.4 hereof.
True, correct and complete copies of each of the agreements
listed in Part 2.10(b) of Annex 2 hereto have been provided to each
of you and your special counsel.
11 Compliance with Law.
Neither the Company, the Guarantor nor any other Subsidiary
is in violation of any law, ordinance, governmental rule or
regulation to which it is subject, which violations, in the
aggregate, could reasonably be expected to have a Material Adverse
Effect.
12 ERISA.
(a) Prohibited Transactions. Neither the execution of
this Agreement, the purchase of the Notes by each of you nor
the consummation of the transactions contemplated by this
Agreement will constitute a "prohibited transaction" (as such
term is defined in section 406(a) of ERISA) or result in a tax
under section 4975 of the IRC. The representation by the
Company and the Guarantor in the preceding sentence is made
in reliance upon your respective representations in Section
1.5(b) hereof as to the source of funds to be used by you to
purchase the Notes.
(b) Pension Plans.
(i) Compliance with ERISA. The Company and the
ERISA Affiliates are in compliance with ERISA, except for
such failures to comply that, in the aggregate for all
such failures, could not reasonably be expected to have
a Material Adverse Effect.
(ii) Funding Status; Relationship of Vested Benefits
to Pension Plan Assets.
(A) No "accumulated funding deficiency" (as
defined in section 302 of ERISA and section 412 of
the IRC), whether or not waived, exists with respect
to any Pension Plan.
(B) The present value of all benefits,
determined as of the most recent valuation date for
such benefits as provided in Section 6.17 hereof,
vested under each Pension Plan does not exceed the
value of the assets of such Pension Plan allocable
to such vested benefits, determined as of such date
as provided in Section 6.17 hereof.
(iii) PBGC. No liability to the PBGC has been
or is expected to be incurred by the Company or any ERISA
Affiliate with respect to any Pension Plan that,
individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect. No
circumstance exists that constitutes grounds under
section 4042 of ERISA entitling the PBGC to institute
proceedings to terminate, or appoint a trustee to
administer, any Pension Plan or trust created thereunder,
nor has the PBGC instituted any such proceeding.
(iv) Multiemployer Plans. Neither the Company nor
any ERISA Affiliate has incurred or presently expects to
incur any withdrawal liability under Title IV of ERISA
with respect to any Multiemployer Plan. There have been
no "reportable events" (as such term is defined in
section 4043 of ERISA) with respect to any Multiemployer
Plan that could result in the termination of such
Multiemployer Plan and give rise to a liability of the
Company or any ERISA Affiliate in respect thereof.
13 Certain Laws.
(a) Environmental Protection Laws.
(i) Compliance. Each of the Company, the Guarantor
and the other Subsidiaries is in compliance with all
Environmental Protection Laws in effect in each
jurisdiction where it is presently doing business and in
which the failure so to comply, in the aggregate for all
such failures, could reasonably be expected to have a
Material Adverse Effect.
(ii) Liability. Neither the Company, the Guarantor
nor any other Subsidiary is subject to any liability
under any Environmental Protection Laws that, in the
aggregate for all such liabilities, could reasonably be
expected to have a Material Adverse Effect.
(iii) Notices. Neither the Company, the
Guarantor nor any other Subsidiary has received any:
(A) notice from any Governmental Authority by
which any of its present or previously-owned or
leased Properties has been identified in any manner
by any Governmental Authority as a hazardous
substance disposal or removal site, "Super Fund"
clean-up site or candidate for removal or closure
pursuant to any Environmental Protection Law;
(B) notice of any Lien arising under or in
connection with any Environmental Protection Law
that has attached to any revenues of, or to, any of
its owned or leased Properties; or
(C) communication, written or oral, from any
Governmental Authority concerning any action or
omission by the Company, the Guarantor or such other
Subsidiary in connection with its ownership or
leasing of any Property resulting in the release of
any Hazardous Substance or resulting in any
violation of any Environmental Protection Law;
where the effect of which, in the aggregate for all such
notices and communications, could reasonably be expected
to have a Material Adverse Effect.
(b) Health Laws.
(i) Compliance. Each of the Company, the Guarantor
and the other Subsidiaries is in compliance with all
Health Laws in effect in each jurisdiction where it is
presently doing business and in which the failure so to
comply, in the aggregate for all such failures, could
reasonably be expected to have a Material Adverse Effect.
(ii) Liability. Neither the Company, the Guarantor
nor any other Subsidiary is subject to any liability
under any Health Laws that, in the aggregate for all such
liabilities, could reasonably be expected to have a
Material Adverse Effect.
(iii) Notices. Neither the Company, the
Guarantor nor any other Subsidiary has received any
notice from any Governmental Authority concerning any
actual or alleged violation of any Health Laws where the
effect of which, in the aggregate for all such notices
and communications, could reasonably be expected to have
a Material Adverse Effect.
14 Transactions are Legal and Authorized; Obligations are
Enforceable.
(a) Transactions are Legal and Authorized. Each of the
issuance, sale and delivery of each Series of Notes by the
Company, the execution and delivery of this Agreement by the
Company and the Guarantor, and compliance by the Company and
the Guarantor with all of the provisions of this Agreement
and, when issued, each Series of the Notes:
(i) is within the corporate powers of the Company
and the Guarantor; and
(ii) is legal and does not conflict with, result in
any breach of any of the provisions of, constitute a
default under, or result in the creation of any Lien upon
any Property of the Company, the Guarantor or any other
Subsidiary under the provisions of, any agreement,
charter instrument, bylaw or other instrument to which
any such Person is a party or by which any such Person
or any of such Person's respective Properties may be
bound.
RED Obligations are Enforceable.
(i) This Agreement has been duly authorized by all
necessary action on the part of the Company and the
Guarantor, has been duly executed and delivered by
authorized officers of the Company and the Guarantor and
constitutes a legal, valid and binding obligation of the
Company and the Guarantor, as the case may be,
enforceable in accordance with its respective terms, and
(ii) the Notes have been duly authorized by all
necessary action on the part of the Company, and, when
issued, will have been duly executed and delivered by
authorized officers of the Company and constitute legal,
valid and binding obligations of the Company, enforceable
in accordance with their respective terms,
except that the enforceability of this Agreement and of the Notes
may be:
(x) limited by applicable bankruptcy,
reorganization, arrangement, insolvency, moratorium or
other similar laws affecting the enforceability of
creditors' rights generally; and
(y) subject to the availability of equitable
remedies.
15 Governmental Consent; Certain Laws.
(a) Governmental Consent. Neither the nature of the
Company, the Guarantor or any other Subsidiary, or of any of
their respective businesses or Properties, nor any
relationship between the Company, the Guarantor or any other
Subsidiary and any other Person, nor any circumstance in
connection with the offer, issuance, sale or delivery of the
Notes and the execution and delivery of this Agreement, is
such as to require a consent, approval or authorization of,
or filing, registration or qualification with, any
Governmental Authority on the part of the Company, the
Guarantor or any other Subsidiary as a condition to the
execution and delivery of this Agreement or the offer,
issuance, sale or delivery of the Notes.
(b) Certain Laws. Neither the Company, the Guarantor
nor any other Subsidiary is subject to regulation under, or
otherwise required to comply with any filing, registration or
notice provisions of, (i) the Investment Company Act of 1940,
as amended, (ii) the Public Utility Holding Company Act of
1935, as amended, (iii) the Interstate Commerce Act, as
amended, or (iv) the Federal Power Act, as amended, except
that Ohse is subject to regulation under the Interstate
Commerce Act, as amended.
16 Private Offering of Notes.
Neither the Company, the Guarantor, any other Subsidiary nor
the Placement Agent (the only Person authorized or employed by the
Company as agent, broker, dealer or otherwise in connection with
the offering or sale of the Notes or any similar Security of the
Company, other than employees of the Company) has offered any of
the Notes or any similar Security of the Company for sale to, or
solicited offers to buy any thereof from, or otherwise approached
or negotiated with respect thereto with, any prospective purchaser
other than the Purchasers, each of whom was offered all or a
portion of the Notes at private sale for investment.
17 No Defaults; Transactions Prior to Facility Closing Date,
etc.
(a) No event has occurred and no condition exists that,
upon the execution and delivery of this Agreement or the
issuance of any Series of the Notes, would constitute a
Default or an Event of Default.
(b) Except as disclosed in Part 2.17(b) of Annex 2
hereto, neither the Company nor any Subsidiary entered into
any transaction during the period beginning on October 2, 1993
and ending on the Facility Closing Date that would have been
prohibited by Section 6.5, Section 6.10, Section 6.11 or
Section 6.14 hereof had such Sections applied during such
period.
18 Use of Proceeds of Notes.
(a) Use of Proceeds. The Company will generally apply
the proceeds from the sale of the Notes to finance Capital
Expenditures of the Company and the Guarantor and for general
corporate purposes, and, specifically, in the manner set forth
in each Purchase Request.
(b) Margin Securities. None of the transactions
contemplated herein and in the Notes (including, without
limitation, the use of the proceeds from the sale of the
Notes) violates, will violate or will result in a violation
of section 7 of the Exchange Act or any regulations issued
pursuant thereto, including, without limitation, Regulations
G, T, U and X of the Board of Governors of the Federal Reserve
System, 12 C.F.R., Chapter II. The obligations of the Company
and the Guarantor under this Agreement and the Notes are not
and will not be directly or indirectly secured (within the
meaning of such Regulation G) by any Margin Security, and no
Notes are being sold on the basis of any such collateral.
(c) Absence of Foreign or Enemy Status. Neither the
sale of the Notes nor the use of proceeds from the sale
thereof will result in a violation of any of the foreign
assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended), or any
ruling issued thereunder or any enabling legislation or
Presidential Executive Order in connection therewith.
19 Company and Guarantor.
The Company and the Guarantor are operated as part of one
consolidated business entity and are directly dependent upon each
other for and in connection with their respective business
activities and their respective financial resources. The Company
and the Guarantor will receive a direct economic and financial
benefit from the Indebtedness incurred under this Agreement by the
Company, and the incurrence of such Indebtedness is in the best
interests of the Company and the Guarantor.
20 Solvency.
The fair value of the business and assets of the Company and
the Guarantor is in excess of the amount that will be required to
pay its respective liabilities (including, without limitation,
contingent, subordinated, unmatured and unliquidated liabilities
on existing debts, as such liabilities may become absolute and
matured), in each case both prior to and after giving effect to the
transactions contemplated by this Agreement and each Series of
Notes. After giving effect to the transactions contemplated by
this Agreement and each Series of Notes, neither the Company nor
the Guarantor will be engaged in any business or transaction, or
about to engage in any business or transaction, for which such
Person has unreasonably small capital, and neither the Company nor
the Guarantor has or had any intent to hinder, delay or defraud any
entity to which it is, or will become, on or after the Facility
Closing Date or such Closing Date, indebted or to incur debts that
would be beyond its ability to pay as such debts mature.
3. CLOSING CONDITIONS
Your respective obligations to purchase and pay for the Notes
to be delivered to you at each Closing at which you are to purchase
Accepted Notes of the Series being sold at such Closing are subject
to the following conditions precedent:
1 Opinions of Counsel.
Each of you shall have received from
(a) Wright, Lindsey & Jennings, counsel for the Company
and the Guarantor, and
(b) Hebb & Gitlin, a Professional Corporation, your
special counsel,
closing opinions, each dated as of such Closing Date, substantially
in the respective forms set forth in Exhibit D1 and Exhibit D2
hereto and as to such other matters as each of you may reasonably
request. This Section 3.1 shall constitute direction by the
Company and the Guarantor to such counsel named in the foregoing
clause (a) to deliver such closing opinion to each of you.
2 Warranties and Representations True.
The warranties and representations contained in Section 2
hereof (as modified by the information disclosed on Schedule 2 to
the Purchase Request delivered in connection with the Notes of such
Series) shall be true on such Closing Date with the same effect as
though made on and as of that date.
3 Officers' Certificates.
Each of you shall have received:
(a) a certificate dated such Closing Date and signed by
a Senior Officer of the Company, substantially in the form of
Exhibit E1 hereto;
(b) a certificate dated such Closing Date and signed by
a Senior Officer of the Guarantor, substantially in the form
of Exhibit E2 hereto;
(c) a certificate dated such Closing Date and signed by
the Secretary or an Assistant Secretary of the Company,
substantially in the form of Exhibit F1 hereto; and
(d) a certificate dated such Closing Date and signed by
the Secretary or an Assistant Secretary of the Guarantor,
substantially in the form of Exhibit F2 hereto.
4 Good Standing Certificates.
Each of you shall have received certificates, dated on or
immediately prior to such Closing Date, from the Secretary of State
(or other appropriate official) of the jurisdiction of
incorporation of the Company and the Guarantor certifying as to the
due incorporation and good standing of the Company and the
Guarantor.
5 Legality.
The Notes of the Series to be acquired by each of you on such
Closing Date shall, on such Closing Date, qualify as a legal
investment for each of you under applicable insurance law (without
regard to any "basket" or "leeway" provisions), and such
acquisition shall not subject you to any penalty or other onerous
condition contained in or pursuant to any such law or regulation,
and each of you shall have received such evidence as you may
reasonably request to establish compliance with this condition.
6 Private Placement Number.
The Company shall have obtained or caused to be obtained a
private placement number for the Notes of such Series from the
CUSIP Service Bureau of Standard & Poor's and each of you shall
have been informed of such private placement number.
7 Expenses.
All fees and disbursements required to be paid pursuant to
Section 1.7(b) hereof shall have been paid in full.
8 Compliance with this Agreement.
Each of the Company, the Guarantor and the other Subsidiaries
shall have performed and complied with all agreements and
conditions contained herein that are required to be performed or
complied with by the Company, the Guarantor and the other
Subsidiaries on or prior to such Closing Date, and such performance
and compliance shall remain in effect on such Closing Date.
9 Bank Credit Agreement; Release of Liens.
(a) Bank Credit Agreement. The Banks and the Company
shall have entered into the Bank Credit Agreement in the form
of Exhibit G to this Agreement, all conditions required to be
satisfied by the Company and the Subsidiaries thereunder shall
have been satisfied or waived and no condition shall exist
that limits or prohibits any borrowing of funds by the Company
thereunder.
(b) Release of Liens. In connection with the execution
and delivery of the Bank Credit Agreement, all Liens under the
Bank Security Documents shall have been released and
terminated, and each of you shall have received evidence
satisfactory to each of you of the release and termination of
such Liens, including, without limitation, (i) a letter
agreement from the parties to the Bank Security Documents
addressed to you to the effect that all Liens under the Bank
Security Documents shall have been released and terminated and
that such parties will take all actions necessary to evidence
such release and termination, and (ii) copies of all Uniform
Commercial Code filings and other recordings evidencing such
release and termination.
10 No Change in Control.
Each of you shall have received satisfactory evidence that no
Change in Control or Control Event shall have occurred at any time
subsequent to the Facility Closing Date.
11 Proceedings Satisfactory.
All proceedings taken in connection with the issuance and sale
of the Notes of such Series and all documents and papers relating
thereto shall be satisfactory to each of you and your special
counsel. Each of you and your special counsel shall have received,
in a timely manner, copies of such documents and papers as you or
they may request in connection therewith or in connection with your
special counsel's closing opinion, all in form and substance
satisfactory to each of you and your special counsel.
4. PAYMENTS
1 Mandatory Principal and Interest Payments.
The Company shall pay, and there shall become due and payable,
on the first (1st) day of each calendar month, commencing with the
month immediately following the Initial Closing Date, equal
installments of principal and interest on each Series of Notes in
the amounts set forth on Schedule 1 of the Notes of each such
Series (each, a "Mandatory P/I Payment"). Each such Mandatory P/I
Payment shall be applied first to the payment in full of accrued
interest then due on the unpaid principal balance of the Notes of
such Series, and any balance of any such Mandatory P/I Payment
shall be applied to the payment of principal of the Notes of such
Series. Without limitation of the foregoing, all of the principal
of the Notes remaining outstanding on the Maturity Date (if any),
together with interest accrued thereon, shall become due and
payable on the Maturity Date.
2 Optional Prepayments.
(a) Optional Prepayments. The Company may, at any time
and from time to time, prepay the principal amount of the
Notes in part, in integral multiples of One Million Dollars
($1,000,000), or in whole, in each case together with:
(i) an amount equal to the Make-Whole Amount on
such date in respect of the principal amount of the Notes
being so prepaid; and
EGIS interest on such principal amount then being
prepaid accrued to the prepayment date.
(b) Notice of Optional Prepayment. The Company will
give notice of any optional prepayment of the Notes to each
holder of Notes not less than thirty (30) days or more than
sixty (60) days before the date fixed for prepayment,
specifying:
(i) such date;
(ii) that such prepayment is to be made pursuant to
Section 4.2 of this Agreement;
(iii) the principal amount of each Note to be
prepaid on such date;
(iv) the interest to be paid on each such Note,
accrued to the date fixed for payment;
(v) the calculation of an estimated Make-Whole
Amount, if any (calculated as if the date of such notice
was the date of prepayment), due in connection with such
prepayment, accompanied by a copy of any applicable
documentation used in connection with determining the
Make-Whole Discount Rate in respect of such prepayment;
and
(vi) an updated Schedule 1 to be attached to each
Series of Notes which sets forth the Mandatory P/I
Payments for such Series of Notes after giving effect to
such optional prepayment in accordance with the terms and
provisions hereof.
Notice of prepayment having been so given, the aggregate
principal amount of the Notes to be prepaid specified in such
notice, together with the Make-Whole Amount as of the
specified prepayment date with respect thereto, if any, and
accrued interest thereon shall become due and payable on the
specified prepayment date. Two (2) Business Days prior to the
making of such prepayment, the Company shall deliver to each
holder of Notes by facsimile transmission a certificate of a
Senior Financial Officer specifying the details of the
calculation of such Make-Whole Amount as of the specified
prepayment date, accompanied by a copy of any applicable
documentation used in connection with determining the Make-
Whole Discount Rate in respect of such prepayment.
(c) Application of Prepayments to Mandatory P/I
Prepayments. Upon any partial prepayment of the Notes
pursuant to this Section 4.2, the principal amount so prepaid
of each Series of Notes shall be applied to the Mandatory P/I
Payments with respect to such Series of Notes, and to the
payment at maturity of such Series of Notes, as provided in
Section 4.1 hereof, in the inverse order of the due date of
such payments.
3 Offer to Prepay upon Change in Control.
(a) Notice and Offer. In the event of either
(i) a Change in Control, or
(ii) the obtaining of knowledge of a Control Event
by any officer of the Company or any Subsidiary
(including, without limitation, via the receipt of notice
of a Control Event from any holder of Notes),
the Company will, within three (3) Business Days of the
occurrence of either of such events, give written notice of
such Change in Control or Control Event to each holder of
Notes by certified mail (with a copy thereof sent via an
overnight courier of national reputation) and, simultaneously
with the sending of such written notice, give telephonic
advice of such Change in Control or Control Event to an
investment officer or other similar representative or agent
of each such holder specified on Annex 1 hereto at the
telephone number specified thereon, or to such other Person
at such other telephone number as any holder of a Note may
specify to the Company in writing.
In the event of a Change in Control, such written notice
shall contain, and such written notice shall constitute, an
irrevocable offer to prepay all, but not less than all, the
Notes held by such holder on a date specified in such notice
(the "Control Prepayment Date") that is not less than thirty
(30) days and not more than sixty (60) days after the date of
such notice. If the Control Prepayment Date shall not be
specified in such notice, the Control Prepayment Date shall
be the thirtieth (30th) day after the date of posting of such
notice. If the Company shall not have received a written
response to such notice from each holder of Notes within ten
(10) days after the date of posting of such notice to such
holder of Notes, then the Company shall immediately send a
second written notice via an overnight courier of national
reputation to each such holder of Notes who shall have not
previously responded to the Company, which notice shall also
specify the Control Prepayment Date.
(b) Acceptance and Payment. To accept or reject such
offered prepayment, a holder of Notes shall cause a notice of
such acceptance or rejection to be delivered to the Company
on or prior to the fifteenth (15th) day after the date of
receipt by such holder of the latest written offer of such
prepayment (the "Offer Determination Date"). If so accepted,
such offered prepayment shall be due and payable on the
Control Prepayment Date. Such offered prepayment shall be
made at one hundred percent (100%) of the principal amount of
such Notes, together with any Make-Whole Amount as of the
Control Prepayment Date with respect thereto and interest on
the Notes then being prepaid accrued to the Control Prepayment
Date. If a holder of Notes shall not have responded to such
offered prepayment on or prior to the Offer Determination
Date, such holder shall be deemed to have accepted such
offered prepayment.
(c) Officer's Certificate. Each offer to prepay the
Notes pursuant to this Section 4.3 shall be accompanied by a
certificate, executed by a Senior Officer of the Company and
dated the date of such offer, specifying:
(i) the Control Prepayment Date;
(ii) that such offer is made pursuant to Section 4.3
of this Agreement;
(iii) the principal amount of each Note offered
to be prepaid;
(iv) the interest that would be due on each such
Note offered to be prepaid, accrued to the date fixed for
payment;
(v) the calculation of an estimated Make-Whole
Amount, if any (calculated as if the date of such notice
was the date of prepayment), that would be due in
connection with such offered prepayment, accompanied by
a copy of any applicable documentation used in connection
with determining the Make-Whole Discount Rate in respect
of such prepayment; and
(vi) in reasonable detail, the nature and date or
proposed date of the Change in Control.
Each such notice shall also contain a legend specifying
that such holder shall be deemed to have accepted such offered
prepayment if such holder shall not have responded to such
offer on or prior to the fifteenth (15th) day following such
holder's receipt of such notice.
(d) Effect of Prepayment. Each partial prepayment of
the principal of any Series of Notes made pursuant to this
Section 4.3 shall be applied against and reduce each of the
then remaining Mandatory P/I Payments of such Series of Notes
by a percentage equal to the aggregate principal amount of the
Notes of such Series so prepaid divided by the aggregate
principal amount of the Notes of such Series outstanding
immediately prior to such prepayment.
(e) Notice Concerning Status of Holders of Notes.
Promptly after each Control Prepayment Date and the making of
all prepayments contemplated on such Control Prepayment Date
under this Section 4.3 (and, in any event, within thirty (30)
days thereafter), the Company shall deliver to each remaining
holder of Notes a certificate signed by a Senior Officer of
the Company containing a list of the then current holders of
Notes (together with their addresses) and setting forth as to
each such holder the outstanding principal amount of Notes of
each Series held by each such holder at such time.
4 Pro Rata Payments.
(a) Mandatory P/I Payments. If at the time any
Mandatory P/I Payment with respect to any Series of Notes is
required to be made pursuant to Section 4.1 hereof, there is
more than one Note of such Series outstanding, the aggregate
principal amount of each such Mandatory P/I Payment shall be
allocated among the Notes of such Series at the time
outstanding in proportion, as nearly as practicable, to the
respective unpaid principal amounts of the Notes of such
Series then outstanding, with adjustments, to the extent
practicable, to equalize for any prior prepayments not in such
proportion.
(b) Optional Prepayments. If at the time any prepayment
under Section 4.2 hereof is due and there is more than one
Note outstanding, the aggregate principal amount of each such
prepayment of the Notes shall be allocated among the Notes at
the time outstanding (without distinguishing among the
different Series) in proportion, as nearly as practicable, to
the respective unpaid principal amounts of the Notes then
outstanding.
5 Notation of Notes on Prepayment.
Upon any partial prepayment of a Note, such Note may, at the
option of the holder thereof, be (but shall not be required to be):
(a) surrendered to the Company pursuant to Section 5.2
hereof in exchange for a new Note in a principal amount equal
to the principal amount remaining unpaid on the surrendered
Note;
(b) made available to the Company for notation thereon
of the portion of the principal so prepaid; or
(c) marked by such holder with a notation thereon of the
portion of the principal so prepaid.
In case the entire principal amount of any Note has been paid, such
Note shall be surrendered to the Company for cancellation and shall
not be reissued, and no Note shall be issued in lieu of the paid
principal amount of any Note.
6 No Other Optional Prepayments.
Except for prepayments made in accordance with this Section
4, the Company may not make any prepayment of principal in respect
of the Notes. The Company will not, and will not permit any
Subsidiary or any Affiliate to, directly or indirectly, acquire or
make any offer to acquire any Notes.
5. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES
1 Registration of Notes.
The Company will cause to be kept at its office maintained
pursuant to Section 6.3 hereof a register for the registration and
transfer of Notes. The name and address of each holder of one or
more Notes, the outstanding principal amount and Series of each
such Note, each transfer thereof and the name and address of each
transferee of one or more Notes shall be registered in such
register. The Person in whose name any Note shall be registered
shall be deemed and treated as the owner and holder thereof for all
purposes hereof and the Company shall not be affected by any notice
or knowledge to the contrary.
2 Exchange of Notes.
(a) Upon surrender of any Note at the office of the
Company maintained pursuant to Section 6.3 hereof duly
endorsed or accompanied by a written instrument of transfer
duly executed by the registered holder of such Note or such
holder's attorney duly authorized in writing, the Company will
execute and deliver, at the Company's expense (except as
provided below), new Notes in exchange therefor, of the same
Series as such surrendered Note, in denominations of at least
One Hundred Thousand Dollars ($100,000) (except as may be
necessary to reflect any principal amount not evenly divisible
by One Hundred Thousand Dollars ($100,000)), in an aggregate
principal amount equal to the unpaid principal amount of the
surrendered Note. Each such new Note shall be payable to such
Person as such holder may request and shall be substantially
in the form of Exhibit A hereto. Each such new Note shall be
dated and bear interest from the date to which interest shall
have been paid on the surrendered Note or dated the date of
the surrendered Note if no interest shall have been paid
thereon. The Company may require payment of a sum sufficient
to cover any stamp tax or governmental charge imposed in
respect of any such transfer of Notes.
(b) The Company will pay the cost of delivering to or
from such holder's home office or custodian bank from or to
the Company, insured to the reasonable satisfaction of such
holder, the surrendered Note and any Note issued in
substitution or replacement for the surrendered Note.
(c) Each holder of Notes agrees that, in the event it
shall sell or transfer any Note without surrendering such Note
to the Company as set forth in Section 5.2(a) hereof, it
shall:
(i) prior to the delivery of such Note, make a
notation thereon of all principal, if any, paid on such
Note and shall also indicate thereon the date to which
interest shall have been paid on such Note; and
(ii) promptly notify the Company of the name and
address of the transferee of any such Note so transferred
and the effective date of such transfer.
3 Replacement of Notes.
Upon receipt by the Company of evidence reasonably
satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of any Note (which evidence shall be, in
the case of an Institutional Investor, notice from such
Institutional Investor of such ownership (or of ownership by such
Institutional Investor's nominee) and of such loss, theft,
destruction or mutilation), and
(a) in the case of loss, theft or destruction, of
indemnity reasonably satisfactory to the Company (provided
that if the holder of such Note is an Institutional Investor
or a nominee of such Institutional Investor, such
Institutional Investor's own unsecured agreement of indemnity
shall be deemed to be satisfactory for such purpose), or
(b) in the case of mutilation, upon surrender and
cancellation thereof,
the Company at its own expense will execute and deliver, in lieu
thereof, a new Note, dated and bearing interest from the date to
which interest shall have been paid on such lost, stolen, destroyed
or mutilated Note or dated the date of such lost, stolen, destroyed
or mutilated Note if no interest shall have been paid thereon.
4 Issuance Taxes.
The Company will pay all taxes (if any) due in connection with
and as the result of the initial issuance and sale of the Notes and
in connection with any modification of this Agreement or the Notes
and shall save each holder of Notes harmless without limitation as
to time against any and all liabilities with respect to all such
taxes. The obligations of the Company under this Section 5.4 shall
survive the payment or prepayment of the Notes and the termination
of this Agreement.
5 Execution and Delivery of Notes by Guarantor.
The Guarantor shall, upon the issuance of any new Notes by the
Company pursuant to Section 5.2 or Section 5.3 hereof, cause the
confirmation of the Unconditional Guaranty provided therein to be
duly executed and delivered in the form of such confirmation
provided on Exhibit A hereto.
6. COVENANTS
The Company and the Guarantor covenant that on and after the
Facility Closing Date and so long as any of the Notes shall be
outstanding:
1 Payment of Taxes and Claims.
The Company will, and will cause each Subsidiary to, pay
before they become delinquent:
(a) all taxes, assessments and governmental charges or
levies imposed upon it or its Property; and
(b) all claims or demands of materialmen, mechanics,
carriers, warehousemen, vendors, landlords and other like
Persons that, if unpaid, might result in the creation of a
Lien upon its Property;
provided, that items of the foregoing description need not be paid
(i) while being actively contested in good faith
and by appropriate proceedings as long as adequate book
reserves have been established and maintained and exist
with respect thereto, and
(ii) so long as the title of the Company or the
other Subsidiary, as the case may be, to, and its right
to use, such Property, is not materially adversely
affected thereby.
In the case of any such item being contested as described in
the immediately preceding sentence (other than the item described
in Part 6.1 of Annex 3 hereto) involving in excess of Two Million
Dollars ($2,000,000), the appropriateness of the proceedings will
be supported by an opinion of the independent counsel responsible
for such proceedings and the adequacy of such reserves will be
supported by an opinion of the independent accountants of the
Company or such Subsidiary (which opinions will be delivered to the
Purchasers and the other holders of Notes as provided in Section
7.1 hereof), provided that, if the aggregate amount of all such
items shall at any time exceed Three Million Dollars ($3,000,000),
regardless of the amount of any individual item, the adequacy of
the reserves for all such items will be supported by opinions of
the independent accountants of the Company or such Subsidiary
(which opinions will be delivered to the Purchasers and the other
holders of the Notes as provided in Section 7.1 hereof).
2 Maintenance of Properties; Corporate Existence; etc.
The Company will, and will cause each Subsidiary to:
(a) Property -- maintain its Property in good condition
and working order, ordinary wear and tear excepted, and make
all necessary renewals, replacements, additions, betterments
and improvements thereto;
(b) Insurance -- maintain, with financially sound and
reputable insurers accorded a rating by A.M. Best Company of
"A" or better and a size rating of "XII" or better (or a
comparable rating by any comparable successor rating agency),
insurance with respect to its Property and business against
such casualties and contingencies, of such types (including,
without limitation, insurance with respect to losses arising
out of Property loss or damage, public liability, business
interruption, larceny, workers' compensation, embezzlement or
other criminal misappropriation) and in such amounts as is
customary in accordance with sound business practices in the
case of corporations of established reputations engaged in the
same or a similar business and similarly situated;
(c) Financial Records -- keep accurate and complete
books of records and accounts in which accurate and complete
entries shall be made of all its business transactions and
that will permit the provision of accurate and complete
financial statements in accordance with GAAP;
(d) Corporate Existence and Rights --
(i) do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate
existence, rights (charter and statutory) and franchises,
except where the failure to do so, in the aggregate,
could not reasonably be expected to have a Material
Adverse Effect, and
(ii) maintain each Subsidiary as a Subsidiary and
each Wholly-Owned Subsidiary as a Wholly-Owned
Subsidiary,
in each case except as permitted by Section 6.5 hereof; and
(e) Compliance with Law -- not be in violation of any
law, ordinance or governmental rule or regulation to which it
is subject (including, without limitation, any Environmental
Protection Law or any Health Law) and not fail to obtain any
license, certificate, permit, franchise or other governmental
authorization necessary to the ownership of its Properties or
to the conduct of its business if such violations or failures
to obtain, in the aggregate, could reasonably be expected to
have (i) a Material Adverse Effect or (ii) a material adverse
effect on the ability of the Company or any Subsidiary to
conduct in the future the business it conducts at the time of
such violation or failure to obtain.
3 Payment of Notes and Maintenance of Office.
The Company will punctually pay, or cause to be paid, the
principal of and interest (and Make-Whole Amount, if any) on the
Notes, as and when the same shall become due according to the terms
of this Agreement and of the Notes. The Company and the Guarantor
will maintain an office at the respective addresses of the Company
and the Guarantor set forth in Section 11.1 hereof where notices,
presentations and demands in respect of this Agreement or of the
Notes may be made upon such Person. Such offices will be
maintained at such addresses until such time as the Company or the
Guarantor, as the case may be, shall notify the Purchasers and the
other holders of the Notes of any change of location of such
office, which will in any event be located within the United States
of America.
4 Liens.
(a) Negative Pledge. The Company will not, and will not
permit any Subsidiary to, cause or permit to exist, or agree
or consent to cause or permit to exist in the future (upon the
happening of a contingency or otherwise), any of its Property,
whether now owned or hereafter acquired, to be subject to any
Lien except:
(i) Taxes, etc. -- Liens securing Property taxes,
assessments or governmental charges or levies or the
claims or demands of materialmen, mechanics, carriers,
warehousemen, vendors, landlords and other like Persons,
so long as
(A) the payment thereof is being actively
contested in good faith and by appropriate
proceedings and adequate book reserves have been
established and maintained and exist with respect
thereto, and
(B) the title of the Company or the
Subsidiary, as the case may be, to, and its right
to use, such Property, is not materially adversely
affected thereby;
(ii) Judicial Liens -- Liens
(A) arising from judicial attachments and
judgments,
(B) securing appeal bonds or supersedeas
bonds, and
(C) arising in connection with court
proceedings (including, without limitation, surety
bonds and letters of credit or any other instrument
serving a similar purpose),
provided that (1) the execution or other enforcement of
such Liens is effectively stayed, (2) the claims secured
thereby are being actively contested in good faith and
by appropriate proceedings, (3) adequate book reserves
shall have been established and maintained and shall
exist with respect thereto and (4) the aggregate amount
so secured shall not at any time exceed Two Million
Dollars ($2,000,000);
(iii) Ordinary Course Business Liens -- Liens
incurred or deposits made in the ordinary course of
business
(A) in connection with workers' compensation,
unemployment insurance, social security and other
like laws, and
(B) to secure the performance of letters of
credit, bids, tenders, sales contracts, leases,
statutory obligations, surety and performance bonds
(of a type other than set forth in Section
6.4(a)(ii) hereof) and other similar obligations not
incurred in connection with the borrowing of money,
the obtaining of advances or the payment of the
deferred purchase price of Property;
provided, however, that all such Liens do not, in the
aggregate, materially detract from the value of such
Property or materially interfere with the use of such
Property in the ordinary conduct of the business of the
Company and the Subsidiaries, taken as a whole;
(iv) Certain Encumbrances -- Liens in the nature of
reservations, exceptions, encroachments, easements,
rights-of-way, covenants, conditions, restrictions,
leases and other similar title exceptions or encumbrances
affecting real Property, provided that such exceptions
and encumbrances do not in the aggregate materially
detract from the value of such Properties or materially
interfere with the use of such Property in the ordinary
conduct of the business of the Company and the
Subsidiaries, taken as a whole;
(v) Intergroup Liens -- Liens on Property of a
Subsidiary, provided that such Liens secure only
obligations owing to the Company or the Guarantor;
(vi) Closing Date Liens --
(A) Liens in existence on the Facility Closing
Date securing Indebtedness, provided that such Liens
and such Indebtedness are described in Part
6.4(a)(vi) of Annex 3 hereto; and
(B) Liens securing renewals, extensions (as
to time) and refinancings of Indebtedness secured
by the Liens described in Part 6.4(a)(vi) of Annex
3 hereto, provided that
(1) the amount of Indebtedness secured
by each such Lien is not increased in excess
of the amount of such Indebtedness outstanding
on the date of such renewal, extension or
refinancing, unless the aggregate amount of
Indebtedness in excess of such outstanding
Indebtedness is permitted to be outstanding
under the terms and provisions of Section
6.8(b) hereof,
(2) none of such Liens is extended to
encumber or otherwise relate to or cover any
additional Property of the Company or any
Subsidiary, and
(3) immediately prior to, and immediately
after the consummation of such renewal,
extension or refinancing, and after giving
effect thereto, no Default or Event of Default
exists or would exist; and
(vii) Secured Indebtedness -- other Liens on
Property of the Company or the Subsidiaries as specified
in Section 6.8(b) hereof securing Indebtedness permitted
pursuant to Section 6.8(b) hereof.
(b) Equal and Ratable Lien; Equitable Lien. In case any
Property shall be subjected to a Lien in violation of this
Section 6.4, the Company will forthwith make or cause to be
made, to the fullest extent permitted by applicable law,
provision whereby the Notes will be secured equally and
ratably with all other obligations secured thereby pursuant
to such agreements and instruments as shall be approved by the
Required Holders and, if the Note Purchase Facility shall not
have been terminated at such time in accordance with Section
1.1(b) hereof, the Required Purchasers, and the Company will
cause to be delivered to each holder of a Note an opinion of
independent counsel to the effect that such agreements and
instruments are enforceable in accordance with their terms.
Regardless of whether the Company complies with the provisions
of the immediately preceding sentence, in case any Property
shall be subjected to a Lien in violation of this Section 6.4,
the Notes shall have the benefit, to the fullest extent that,
and with such priority as, the holders of Notes may be
entitled thereto under applicable law, of an equitable Lien
on such Property securing the Notes. A violation of this
Section 6.4 will constitute an Event of Default, whether or
not any such provision is made or action is taken pursuant to
this Section 6.4(b).
(c) Financing Statements. The Company will not, and
will not permit any Subsidiary to, sign or file a financing
statement under the Uniform Commercial Code of any
jurisdiction that names the Company or such Subsidiary as
debtor, or sign any security agreement authorizing any secured
party thereunder to file any such financing statement, except,
in any such case, a financing statement filed or to be filed
to perfect or protect a security interest that the Company or
such Subsidiary is entitled to create, assume or incur, or
permit to exist, under the foregoing provisions of this
Section 6.4 or to evidence for informational purposes a
lessor's interest in Property leased to the Company or any
such Subsidiary.
5 Merger, Consolidation, Transfers of Property, etc.
(a) Merger and Consolidation. The Company will not, and
will not permit any Subsidiary to, merge with or into or
consolidate with any other Person or permit any other Person
to merge or consolidate with or into it (except that a
Subsidiary may merge into or consolidate with the Company or
a Wholly-Owned Subsidiary), provided that the foregoing
restriction does not apply to the merger or consolidation of
the Company or the Guarantor with another corporation if:
(i) the Company or the Guarantor, as the case may
be, is the corporation that results from such merger or
consolidation (the "Surviving Corporation");
(ii) the due and punctual payment of the principal
of and Make-Whole Amount, if any, and interest on all of
the Notes, according to their tenor, and the due and
punctual performance and observance of all the covenants
in the Notes and this Agreement to be performed or
observed by the Company or the Guarantor, as the case may
be, are expressly assumed by the Surviving Corporation
pursuant to such agreements and instruments as shall be
approved by the Required Holders and, if the Note
Purchase Facility shall not have been terminated at such
time in accordance with Section 1.1(b) hereof, the
Required Purchasers, and the Company causes to be
delivered to each holder of Notes an opinion of
independent counsel to the effect that such agreements
and instruments are enforceable in accordance with their
terms (subject to customary qualifications); and
(iii) immediately prior to, and immediately
after the consummation of the transaction, and after
giving effect thereto, no Default or Event of Default
exists or would exist.
(b) Acquisition of Stock, etc. The Company will not,
and will not permit any Subsidiary to, acquire any stock of
any corporation if upon completion of such acquisition such
corporation would be a Subsidiary, or acquire all of the
Property of, or such of the Property as would permit the
transferee to continue any one or more integral business
operations of, any Person unless, immediately prior to, and
immediately after the consummation of such acquisition, and
after giving effect thereto, no Default or Event of Default
exists or would exist.
(c) Transfers of Property. The Company will not, and
will not permit any Subsidiary to, sell, lease as lessor,
transfer or otherwise dispose of any Property (collectively,
"Transfers"), except Transfers of inventory and Transfers of
other Property for Fair Market Value, in each case in the
ordinary course of business of the Company or any such
Subsidiary.
6 Tangible Net Worth.
The Company will maintain, as of the last day of each fiscal
quarter, a Tangible Net Worth of not less than the sum of
(a) One Hundred Twenty-Nine Million Dollars
($129,000,000), plus
(b) the amount of all proceeds of any issuance of
capital stock of the Company after the Facility Closing Date,
plus
(c) the amount of any Subordinated Debt which is
converted into capital stock of the Company after the Facility
Closing Date, plus
(d) in the case of each fiscal quarter ending on or
after October 1, 1994, the Applicable Net Income Carryover.
As used herein,
Tangible Net Worth -- means the excess of total
assets over total liabilities, as each of total assets
and total liabilities would be shown on a consolidated
balance sheet for the Company and the Subsidiaries
prepared in accordance with GAAP consistent with GAAP
applied in the preparation of the financial statements
referred to in Section 7.1(a) and Section 7.1(b) hereof,
excluding, however, Intangible Assets from such
determination of total assets.
Intangible Assets -- means (i) goodwill,
organizational expenses, research and development
expenses, trademarks, trade names, copyrights, patents,
patent applications, licenses and rights in any thereof,
and other similar intangibles, (ii) treasury stock, (iii)
Securities which are not readily marketable, (iv) cash
held in a sinking or other analogous fund established for
the purpose of redemption, retirement or prepayment of
capital stock, (v) any write-up in the book value of any
asset resulting from a revaluation thereof subsequent to
the Facility Closing Date, and (vi) any items not
included in clauses (i) through (v) above, inclusive,
which are treated as intangibles in conformity with GAAP.
Applicable Net Income Carryover -- at any time that
any determination thereof is to be made means an amount
equal to the sum of (i) sixty percent (60%) of the net
income of the Company and the Subsidiaries, determined
on a consolidated basis for such Persons in accordance
with GAAP, for the fiscal year of the Company ending on
October 1, 1994, plus (ii) sixty percent (60%) of the net
income of the Company and the Subsidiaries, determined
on a consolidated basis for such Persons in accordance
with GAAP, for each and every fiscal year of the Company
ending after October 1, 1994 which has ended on or before
the date such determination of Applicable Net Income
Carryover is to be made; provided, however, that, in the
event that such net income for any fiscal year described
above is less than zero (0), the net income of the
Company and the Subsidiaries for such fiscal year shall
be deemed to be zero (0) for purposes of calculating
Applicable Net Income Carryover.
7 Working Capital; Current Ratio.
The Company will maintain as of the last day of each fiscal
quarter:
(a) a ratio of current assets to current liabilities
(exclusive of current deferred taxes), in each case as would
be shown on a consolidated balance sheet for the Company and
the Subsidiaries at such time prepared in accordance with
GAAP, of not less than 1.5 to 1.0, and
(b) an excess of current assets over current liabilities
(exclusive of current deferred taxes), in each case as would
be shown on a consolidated balance sheet for the Company and
the Subsidiaries at such time prepared in accordance with
GAAP, of not less than Sixty Million Dollars ($60,000,000).
8 Limitations on Indebtedness.
(a) Leverage Ratio. The Company will maintain, as of
the last day of each fiscal quarter, a Leverage Ratio of not
more than 0.5 to 1.0.
As used herein:
Leverage Ratio -- means for any date of
determination thereof, the quotient (expressed as a
ratio) of (x) Indebtedness with maturities of greater
than one (1) year (including, without limitation, all
current portions thereof and all Subordinated Debt) of
the Company and the Subsidiaries as would appear on a
consolidated balance sheet prepared in accordance with
GAAP for such Persons at such time, divided by (y) the
sum of (i) Indebtedness with maturities of greater than
one (1) year (including, without limitation, all current
portions thereof and all Subordinated Debt) of the
Company and the Subsidiaries as would appear on a
consolidated balance sheet prepared in accordance with
GAAP for such Persons at such time, plus (ii)
stockholders' equity of the Company and the Subsidiaries
(excluding, in any event, any minority interests) as
would appear on a consolidated balance sheet prepared in
accordance with GAAP for such Persons at such time, plus
(iii) long-term deferred taxes, attributable to the
Company's prior use of cash accounting, of the Company
and the Subsidiaries as would appear on a consolidated
balance sheet prepared in accordance with GAAP for such
Persons at such time, plus (iv) deferred taxes,
attributable to the Company's use of the "farm price
method" of accounting for deferred taxes, of the Company
and the Subsidiaries as would appear on a consolidated
balance sheet prepared in accordance with GAAP for such
Persons at such time.
(b) Limitation on Secured Indebtedness. The Company
will not, and will not permit any Subsidiary to, create,
incur, assume or suffer to exist any Indebtedness or other
liabilities or obligations, whether matured or unmatured,
liquidated or unliquidated, direct or contingent, or joint or
several, which are secured by, or have the benefit of, any
Lien except Indebtedness secured by or having the benefit of,
or in respect of:
(i) Liens outstanding on the Facility Closing Date
described in Part 6.4(a)(vi) of Annex 3 hereto;
(ii) purchase money Liens or purchase money security
interests upon or in any fixed assets acquired or held
by the Company or any Subsidiary in the ordinary course
of business to secure the purchase price of such fixed
assets or to secure Indebtedness incurred solely for the
purpose of financing the acquisition of such fixed
assets;
(iii) Liens or security interests existing on
fixed assets at the time of their acquisition;
(iv) Liens and security interests on previously
acquired fixed assets, the Fair Market Value of which
assets does not exceed by more than one hundred percent
(100%) the amount of Indebtedness secured thereby, all
as determined by the Required Holders and, if the Note
Purchase Facility shall not have been terminated at such
time in accordance with Section 1.1(b) hereof, the
Required Purchasers, in their sole, good faith
discretion; or
(v) Liens in respect of obligations for Capital
Leases of real or personal fixed assets acquired or held
by the Company in the ordinary course of business which
are secured only by the fixed assets that are the subject
of such Capital Lease,
provided, however, that (x) the aggregate amount of any
Indebtedness incurred in connection with renewals, extensions
(as to time) and refinancings of Indebtedness described in
Part 6.4(a)(vi) of Annex 3 hereto in excess of the amount of
such Indebtedness outstanding immediately prior to each such
renewal, extension or refinancing, plus (y) the aggregate
principal amount of the Indebtedness secured by the Liens or
security interests referred to in clause (ii), clause (iii)
and clause (iv) of this Section 6.8(b), plus (z) the aggregate
amount of capitalized payment obligations under the Capital
Leases specified in clause (v) of this Section 6.8(b) shall
not at any time exceed Twenty-Five Million Dollars
($25,000,000).
(c) Limitation on Subsidiary Indebtedness. The Company
shall not at any time permit Total Subsidiary Indebtedness to
exceed ten percent (10%) of Consolidated Indebtedness at such
time.
As used herein:
Total Subsidiary Indebtedness -- means, at any time
(without duplication),
(a) the aggregate Indebtedness of all
Subsidiaries outstanding at such time, plus
(b) the aggregate amount of claims in respect
of the redemption of, and accumulated unpaid
dividends on, all preferred stock (and other equity
Securities and all other Securities convertible
into, exchangeable for, or representing the right
to purchase, preferred stock) of all Subsidiaries
outstanding at such time (whether or not any right
of redemption or conversion is exercisable by the
holder thereof at such time),
determined, in each case, on a combined basis for such
Persons, but excluding from such calculation (i) any such
Indebtedness of any Subsidiary in respect of the
Unconditional Guaranty or any Guaranty of the Notes
provided pursuant to, and in accordance with the
provisions of, Section 6.15 hereof, (ii) any such
Indebtedness of any Subsidiary in respect of any Guaranty
of any of the obligations of the Company under (A) the
Bank Credit Agreement and (B) any other primary
Indebtedness of the Company, so long as, in each such
case, such Subsidiary has entered into a Guaranty of the
obligations of the Company under the Notes and this
Agreement, (iii) any such Indebtedness of any Subsidiary
existing on the Facility Closing Date which is described
in Part 6.8(c) of Annex 3 hereto, and (iv) all such
preferred stock and other equity Securities which are
legally and beneficially owned by the Company.
Consolidated Indebtedness -- means, at any time, the
aggregate amount of Indebtedness of the Company and the
Subsidiaries, determined on a consolidated basis for such
Persons at such time in accordance with GAAP.
(d) Limitation on Indebtedness. The Company will not,
and will not permit any Subsidiary to, create, incur, assume
or suffer to exist any Indebtedness or other liabilities or
obligations, whether matured or unmatured, liquidated or
unliquidated, direct or contingent, or joint or several,
except:
(i) liabilities of the Company in respect of the
Notes and this Agreement and the Bank Credit Agreement,
and liabilities of any Subsidiary in respect of the
Unconditional Guaranty or any other guaranty of the
obligations of the Company under the Notes and this
Agreement or the Bank Credit Agreement;
(ii) long-term Indebtedness, provided the Company
complies with the provisions of Section 6.8(a) hereof;
(iii) Indebtedness secured by Liens permitted
to be outstanding pursuant to Section 6.8(b) hereof;
(iv) unsecured short-term Indebtedness of the
Company incurred for the purpose of funding the working
capital requirements of the Company and the Subsidiaries;
(v) Indebtedness of Subsidiaries, provided the
Company complies with the provisions of Section 6.8(c)
hereof; and
(vi) those liabilities listed in Part 6.8(d) of
Annex 3 hereto.
(e) Loans, Guaranties, etc. The Company will not, and
will not permit any Subsidiary to, make any loans or advances
to or investments in any Person, or directly or indirectly
enter into any Guaranty or otherwise assure a creditor against
loss in respect of any Indebtedness or other obligations or
liabilities (contingent or otherwise) of any Person unless any
such amounts have been included as Indebtedness in making
calculations with respect to each representation, warranty and
covenant set forth in this Agreement.
9 Cash Flow Coverage Ratio.
The Company will maintain, as of the last day of each fiscal
quarter, a Cash Flow Coverage Ratio of not less than 1.3 to 1.0 for
the period of eight (8) consecutive fiscal quarters then most
recently ended.
As used herein:
Cash Flow Coverage Ratio -- means for any period of
determination thereof, the quotient (expressed as a
ratio) of (x) the sum of (i) Consolidated Net Income,
plus (ii) income taxes of the Company and the
Subsidiaries, plus (iii) Consolidated Interest Expense,
plus (iv) Consolidated Lease Expense, plus (iv)
depreciation and amortization of the Company and the
Subsidiaries, divided by (y) the sum of (i) Consolidated
Interest Expense, plus (ii) Consolidated Lease Expense,
plus (iii) all scheduled and optional principal payments
on long-term Indebtedness (including, without limitation,
imputed principal on Capital Leases), other than, in each
such case, the principal amount of any such Indebtedness
which shall be paid during such period from the proceeds
of Indebtedness incurred in connection with any
refinancing thereof prior to, or at the time of, the
maturity thereof, plus (iv) the sum of (a) dividends on
the capital stock of the Company or a Subsidiary (other
than dividends paid to the Company or a Subsidiary), (b)
purchases or other acquisitions by the Company or any
Subsidiary of any capital stock of the Company, and (c)
distributions of assets to the Company's stockholders as
such.
Consolidated Net Income -- means, for any period,
net income (or loss) from continuing operations (after
income taxes) of the Company and the Subsidiaries,
excluding, in any event, net income (or loss) in respect
of extraordinary items, net income (or loss) from
discontinued operations and the cumulative effects of
changes in accounting principles, all as determined on
a consolidated basis for such Persons in accordance with
GAAP.
Consolidated Interest Expense -- means, for any
period, the aggregate amount of interest accrued or
capitalized on, or with respect to, Indebtedness
(including, without limitation, amortization of debt
discount, imputed interest on Capital Leases and interest
on the Notes), but without giving effect to any deduction
for any interest income, of the Company and the
Subsidiaries determined on a consolidated basis for such
Persons for such period in accordance with GAAP.
Consolidated Lease Expense -- means, for any period,
the aggregate amount of rentals payable in respect of
Operating Leases for such period by any one or more of
the Company and the Subsidiaries, determined on a
consolidated basis for such Persons for such period in
accordance with GAAP.
Operating Lease -- means, with respect to any
Person, any lease other than a Capital Lease.
10 Dividends and Prepayments on Subordinated Debt.
(a) Limit on Dividends and Other Distributions. The
Company will not declare or pay any dividends (whether in cash
or other Property), purchase, redeem, retire or otherwise
acquire for value any of its capital stock (or any warrants,
rights or options to acquire any shares of such capital stock)
now or hereafter outstanding, or make any other distribution
of Property to its stockholders, or permit any of its
Subsidiaries to purchase or otherwise acquire for value any
capital stock of the Company if:
(i) after giving effect to such dividend,
distribution or other payment, the aggregate amount of
all such dividends, distributions and other payments
exceeds Two Million Seven Hundred Fifty Thousand Dollars
($2,750,000) during any fiscal year, or
(ii) at the time of the declaration of such
dividend, distribution or other payment, and immediately
before, and after giving effect to the payment thereof,
an Event of Default exists or would exist.
(b) No Subordinated Debt Prepayments. The Company will
not at any time, and will not at any time permit any
Subsidiary to, make any prepayments, directly or indirectly,
of principal on, or redeem, repurchase or retire, any existing
or future Subordinated Debt of the Company or any Subsidiary.
11 Capital Expenditures.
The Company will not, and will not permit any Subsidiary to,
make any Capital Expenditures, if:
(a) the aggregate amount of Capital Expenditures of the
Company and the Subsidiaries, determined on a consolidated
basis for such Persons in accordance with GAAP, in any one (1)
fiscal year would be in excess of Fifty Million Dollars
($50,000,000); provided, however, that
(i) the amount of Capital Expenditures incurred in
fiscal year 1994 and fiscal year 1995, up to (but not in
excess of) a combined aggregate amount for such two (2)
fiscal year period of Fifty Million Dollars
($50,000,000), in connection with the Company's planned
construction of a new processing facility in the United
States of America, and
(ii) the portion of any purchase price in respect
of any Capital Expenditure which was paid for by the
Company solely with shares of the Company's capital
stock,
shall be excluded from the application of this covenant; or
(b) at the time of such Capital Expenditure, and
immediately before and after giving effect thereto, a Default
or an Event of Default exists or would exist.
As used herein:
Capital Expenditure -- means, with respect to any
Person, any payments in respect of the acquisition or
construction cost of Property (including, without
limitation, (i) the purchase price of tangible assets
acquired by such Person and (ii) the gross purchase price
of assets or stock, as the case may be, acquired by such
Person in connection with any merger, consolidation,
asset acquisition, stock purchase or similar transaction
entered into by such Person) or other expenditures in
respect of Property, in each case that is, or is part of
a group of related items of Property substantially all
of which are, required to be classified as long-term
assets on a balance sheet of such Person prepared in
accordance with GAAP.
12 Operating Lease Rentals.
The Company will not create or suffer to exist, or permit any
of the Subsidiaries to create or suffer to exist, any obligations
for the payment of rent for any Property under leases or agreements
to lease, which do or would constitute Operating Leases, which in
the aggregate have annual rental payments for any fiscal year in
excess of seven and one-half percent (7.5%) of Net Tangible Assets
determined at the end of such fiscal year; provided, however, that
leases for rolling stock shall be excluded from the foregoing
calculation.
As used herein:
Net Tangible Assets -- means total assets minus
Intangible Assets minus current liabilities (exclusive
of current deferred taxes) of the Company and the
Subsidiaries, in each case as would appear on a
consolidated balance sheet for such Persons prepared in
accordance with GAAP.
13 Nature of Business.
The Company will not, and will not permit any Subsidiary to,
engage in any business if, as a result thereof, the principal
businesses of the Company and the Subsidiaries, taken as a whole,
would not be substantially the same as the businesses described in
the Most Recent 10-K.
14 Transactions with Affiliates.
The Company will not, and will not permit any Subsidiary to,
enter into any transaction, including, without limitation, the
purchase, sale or exchange of Property or the rendering of any
service, with any Affiliate, except in the ordinary course of and
pursuant to the reasonable requirements of the Company's or such
Subsidiary's business and upon fair and reasonable terms no less
favorable to the Company or such Subsidiary than would obtain in
a comparable arm's-length transaction with a Person not an
Affiliate.
15 Guaranties of Subsidiaries.
(a) New Subsidiaries. The Company shall cause each
Subsidiary not existing as of the Facility Closing Date to
execute and deliver to the holders of the Notes:
(i) an unconditional guaranty agreement, in
substantially the form of the Unconditional Guaranty set
forth in Section 10 hereof, and
(ii) an agreement by such Subsidiary in favor of the
holders of the Notes pursuant to which such Subsidiary
agrees to be bound by the terms and provisions of this
Agreement,
in each case, within ten (10) Business Days of the creation
or acquisition of any such Subsidiary.
(b) Certain Existing Subsidiaries. If Ohse or Hudson
Poland shall at any time own or hold, directly or indirectly,
assets having a book value equal to or in excess of five
percent (5%) of the total assets of the Company and the
Subsidiaries at such time, as would be shown on a consolidated
balance sheet for such Persons prepared in accordance with
GAAP, then the Company shall cause such Person to execute and
deliver to the holders of the Notes:
(i) an unconditional guaranty agreement, in
substantially the form of the Unconditional Guaranty set
forth in Section 10 hereof, and
(ii) an agreement by such Person in favor of the
holders of the Notes pursuant to which such Person agrees
to be bound by the terms and provisions of this
Agreement,
in each case, within ten (10) Business Days of such time.
(c) Delivery of Documents. The delivery of any
agreements pursuant to Section 6.15(a) or Section 6.15(b)
hereof shall be accompanied by such other documents as any
Purchaser or other holder of Notes may reasonably request,
including, without limitation, charter documents, bylaws, and
appropriate resolutions of the Board of Directors of any such
Subsidiary providing such a guaranty agreement. Upon the
delivery thereof, such guaranty agreement, together with the
Unconditional Guaranty set forth in Section 10 hereof, shall
constitute the "Unconditional Guaranty" hereunder and such
Subsidiary providing such guaranty agreement, together with
the Guarantor, shall be deemed to be the "Guarantor"
hereunder.
(d) Guaranties of Bank Credit Agreement Obligations.
Notwithstanding the other terms and provisions of this Section
6.15, the Company will not at any time permit any Subsidiary
or Affiliate to provide to the Banks any Guaranty of the
Company's obligations under the Bank Credit Agreement unless
such Subsidiary or such Affiliate shall, at the same time,
deliver a guaranty agreement and other documents to the
holders of the Notes as specified in clause (i) and clause
(ii) of Section 6.15(a) hereof.
16 Restricted Investments.
The Company will not at any time, and will not at any time
permit any Subsidiary to, make any investments (including, without
limitation, loans or other advances to or for the benefit of any
Subsidiary) except:
(a) investments in readily marketable obligations of the
United States of America maturing within one (1) year from
date of purchase,
(b) investments in prime (by recognized United States
financial standards) commercial paper maturing within one (1)
year from date of purchase,
(c) investments in fully insured domestic certificates
of deposit and certificates of deposit issued by any Bank
(provided such Bank's outstanding long-term debt securities
are rated at least "A" by Standard & Poor's or at least "A-
1" by Moody's Investors Service, Inc.) maturing within one (1)
year from the date of creation thereof,
(d) endorsements of negotiable instruments for
collection in the ordinary course of business,
(e) investments in other comparable prudent investments,
including investments in or issued by any Bank, reported to
the Purchasers and the other holders of Notes in conjunction
with the Company's quarterly officer's certificate required
by Section 7.2 hereof (together with a copy of the Company's
then-current investment policy), and
(f) investments in Subsidiaries that have complied with
the requirements of Section 6.15 hereof;
provided, however, that this Section 6.16 shall not be deemed to
prohibit the Company from creating accounts receivable owing from
any Subsidiary as a result of the sale of inventory in accordance
with Section 6.14 hereof.
17 ERISA.
(a) Compliance. The Company will, and will cause each
ERISA Affiliate to, at all times with respect to each Pension
Plan, make timely payment of contributions required to meet
the minimum funding standard set forth in ERISA or the IRC
with respect thereto, and to comply with all other applicable
provisions of ERISA.
(b) Relationship of Vested Benefits to Pension Plan
Assets. The Company will not at any time permit the present
value of all employee benefits vested under each Pension Plan
to exceed the assets of such Pension Plan allocable to such
vested benefits at such time, in each case determined pursuant
to Section 6.17(c) hereof.
(c) Valuations. All assumptions and methods used to
determine the actuarial valuation of vested employee benefits
under Pension Plans and the present value of assets of Pension
Plans will be reasonable in the good faith judgment of the
Company and will comply with all requirements of law.
(d) Prohibited Actions. The Company will not, and will
not permit any ERISA Affiliate to:
(i) engage in any "prohibited transaction" (as such
term is defined in section 406 of ERISA or section 4975
of the IRC) that would result in the imposition of a
material tax or penalty;
(ii) incur with respect to any Pension Plan any
"accumulated funding deficiency" (as such term is defined
in section 302 of ERISA), whether or not waived;
(iii) terminate any Pension Plan in a manner
that could result in
(A) the imposition of a Lien on the Property
of the Company or any Subsidiary pursuant to section
4068 of ERISA, or
(B) the creation of any liability under
section 4062 of ERISA;
(iv) fail to make any payment required by section
515 of ERISA; or
(v) at any time be an "employer" (as such term is
defined in section 3(5) of ERISA) required to contribute
to any Multiemployer Plan if, at such time, it could
reasonably be expected that the Company or any Subsidiary
will incur withdrawal liability in respect of such
Multiemployer Plan and such liability, if incurred,
together with the aggregate amount of all other
withdrawal liability as to which there is a reasonable
expectation of incurrence by the Company or any
Subsidiary under any one or more Multiemployer Plans,
could reasonably be expected to have a Material Adverse
Effect.
18 Private Offering.
The Company will not, and will not permit any Person acting
on its behalf to, offer the Notes or any part thereof or any
similar Securities for issuance or sale to, or solicit any offer
to acquire any of the same from, any Person so as to bring the
issuance and sale of the Notes within the provisions of section 5
of the Securities Act.
19 Certain Accounting Matters.
The Company will not, at any time,
(a) change its methods of accounting, unless required
in accordance with GAAP, or
(b) change its fiscal year.
7. INFORMATION AS TO COMPANY
1 Financial and Business Information.
The Company will deliver to each Purchaser and to each other
holder of Notes:
(a) Quarterly Statements -- as soon as practicable after
the end of each quarterly fiscal period in each fiscal year
of the Company (other than the last quarterly fiscal period
of each such fiscal year), and in any event within forty-five
(45) days thereafter, duplicate copies of
(i) a consolidated balance sheet of the Company and
the Subsidiaries as at the end of such quarter, and
(ii) consolidated statements of operations and cash
flows of the Company and the Subsidiaries for such
quarter and (in the case of the second and third
quarters) for the portion of the fiscal year ending with
such quarter,
setting forth in each case in comparative form the figures for
the corresponding periods in the previous fiscal year, all in
reasonable detail, prepared in accordance with GAAP applicable
to quarterly financial statements generally and certified as
complete and correct, subject to changes resulting from year-
end adjustments, by a Senior Financial Officer, and
accompanied by the certificate required by Section 7.2 hereof;
(b) Annual Statements -- as soon as practicable after
the end of each fiscal year of the Company, and in any event
within ninety (90) days thereafter, duplicate copies of
(i) consolidated balance sheets of the Company and
the Subsidiaries as at the end of such year, and
(ii) consolidated statements of operations and cash
flows of the Company and the Subsidiaries for such year,
setting forth in each case in comparative form the figures for
the previous fiscal year, all in reasonable detail, prepared
in accordance with GAAP and accompanied by
(A) an opinion of independent certified public
accountants of recognized national standing, which
opinion shall, without qualification (including,
without limitation, qualifications related to the
scope of the audit or the ability of the Company or
a Subsidiary to continue as a going concern), state
that such financial statements present fairly, in
all material respects, the financial position of the
companies being reported upon and their results of
operations and cash flows and have been prepared in
conformity with GAAP, and that the examination of
such accountants in connection with such financial
statements has been made in accordance with
generally accepted auditing standards, and that such
audit provides a reasonable basis for such opinion
in the circumstances,
(B) a certification by a Senior Financial
Officer that such consolidated financial statements
are complete and correct, and
(C) the certificates required by Section 7.2
and Section 7.3 hereof;
(c) Opinions of Independent Accountants and Counsel -
- as soon as practicable after the end of each fiscal year of
the Company, and in any event within ninety (90) days
thereafter, duplicate copies of all opinions of independent
accountants and counsel required pursuant to Section 6.1
hereof;
(d) Audit Reports -- promptly upon receipt thereof, a
copy of each other report submitted to the Company or any
Subsidiary by independent accountants in connection with any
annual, interim or special audit made by them of the books of
the Company or any Subsidiary;
(e) SEC and Other Reports -- within fifteen (15) days
of their becoming available, one copy, without duplication,
of (i) each financial statement, report, notice or proxy
statement sent by the Company or any Subsidiary to public
securities holders generally, and (ii) each regular or
periodic report (including, without limitation, each Annual
Report on Form 10-K, each Quarterly Report on Form 10-Q and
each Current Report on Form 8-K), each registration statement
(other than registration statements on Form S-8) which shall
have become effective (without exhibits except as expressly
requested by a holder of Notes), and each final prospectus,
and all amendments to any of the foregoing, filed by the
Company or any Subsidiary with, or received by, such Person
in connection therewith from, the Securities and Exchange
Commission or any successor agency;
(f) ERISA --
(i) immediately upon becoming aware of the
occurrence of any
(A) "reportable event" (as such term is
defined in section 4043 of ERISA), or
(B) "prohibited transaction" (as such term is
defined in section 406 of ERISA or section 4975 of
the IRC),
in connection with any Pension Plan or any trust created
thereunder, a written notice specifying the nature
thereof, what action the Company is taking or proposes
to take with respect thereto and, when known, any action
taken by the IRS, the Department of Labor or the PBGC
with respect thereto; and
(ii) prompt written notice of and, where applicable,
a description of
(A) any notice from the PBGC in respect of the
commencement of any proceedings pursuant to section
4042 of ERISA to terminate any Pension Plan or for
the appointment of a trustee to administer any
Pension Plan,
(B) any distress termination notice delivered
to the PBGC under section 4041 of ERISA in respect
of any Pension Plan, and any determination of the
PBGC in respect thereof,
(C) the placement of any Multiemployer Plan
in reorganization status under Title IV of ERISA,
(D) any Multiemployer Plan becoming
"insolvent" (as such term is defined in section 4245
of ERISA) under Title IV of ERISA,
(E) the whole or partial withdrawal of the
Company or any ERISA Affiliate from any
Multiemployer Plan and the withdrawal liability
incurred in connection therewith, and
(F) any material increase in contingent
liabilities of the Company or any Subsidiary in
respect of any post-retirement employee welfare
benefits.
(g) Actions, Proceedings -- promptly after the
commencement thereof, written notice of any action or
proceeding relating to the Company or any Subsidiary in any
court or before any Governmental Authority or arbitration
board or tribunal as to which there is a reasonable
possibility of an adverse determination and that, if adversely
determined, is reasonably likely to have a Material Adverse
Effect;
(h) Certain Matters -- prompt written notice of and a
description of any event or circumstance that, had such event
or circumstance occurred or existed immediately prior to the
Facility Closing Date or any Closing Date, would have been
required to be disclosed as an exception to any statement set
forth in Section 2.13(a) or Section 2.13(b) hereof;
(i) Notice of Default or Event of Default -- immediately
upon becoming aware of the existence of any condition or event
that constitutes a Default or an Event of Default, a written
notice specifying the nature and period of existence thereof
and what action the Company is taking or proposes to take with
respect thereto;
(j) Notice of Claimed Default -- immediately upon
becoming aware that the holder of any Note, or of any
Indebtedness or other Security of the Company or any
Subsidiary, shall have given notice or taken any other action
with respect to a claimed Default, Event of Default, default
or event of default, a written notice specifying the notice
given or action taken by such holder and the nature of the
claimed Default, Event of Default, default or event of default
and what action the Company is taking or proposes to take with
respect thereto;
(k) Information Furnished to Other Creditors -- promptly
after any request therefor, copies of any statement, report
or certificate furnished to any holder of Indebtedness of the
Company or any Subsidiary;
(l) Rule 144A -- promptly after any request therefor,
information requested to comply with 17 C.F.R. Section 230.144A, as
amended from time to time; and
(m) Requested Information -- promptly after any request
therefor, such other data and information as from time to time
may be reasonably requested by any holder of Notes, including,
without limitation, data, information, agreements, instruments
or documents relating to the business or financial operations
or performance of the Company or any Subsidiary and any
financial statements prepared by the Company (in addition to
the financial statements specified in clause (a) and clause
(b) of this Section 7.1), in each case which may be reasonably
requested by any holder of Notes.
Each set of financial statements delivered to each holder of
Notes pursuant to Section 7.1(a) or Section 7.1(b) hereof shall be
accompanied by a certificate of a Senior Financial Officer setting
forth:
(a) Covenant Compliance -- the information (including
detailed calculations) required in order to establish whether
the Company was in compliance with the requirements of Section
6.4 through Section 6.12 hereof, inclusive, during the period
covered by the income statement then being furnished
(including with respect to each such Section, where
applicable, the calculations of the maximum or minimum amount,
ratio or percentage, as the case may be, permissible under the
terms of such Sections, and the calculation of the amounts,
ratio or percentage then in existence);
(b) Event of Default -- a statement that the signers
have reviewed the relevant terms hereof and have made, or
caused to be made, under their supervision, a review of the
transactions and conditions of the Company and the
Subsidiaries from the beginning of the accounting period
covered by the income statement being delivered therewith to
the date of the certificate and that such review shall not
have disclosed the existence during such period of any
condition or event that constitutes a Default or an Event of
Default or, if any such condition or event existed or exists,
specifying the nature and period of existence thereof and what
action the Company shall have taken or proposes to take with
respect thereto; and
(c) Investments -- a description of all investments of
the Company and the Subsidiaries made pursuant to Section
6.16(e) hereof during such accounting period (which
description shall specify the type of investment, the cost
thereof and the book value thereof), and, if any such
investments are made, a description of the Company's then-
current investment policy, as required by Section 6.16(e)
hereof.
3 Accountants' Certificates.
Each set of annual financial statements delivered pursuant to
Section 7.1(b) hereof shall be accompanied by a certificate of the
accountants who certify such financial statements, stating that
(a) they have reviewed this Agreement and stating
further, whether, in making their audit, such accountants have
become aware of any condition or event that then constitutes
a Default or an Event of Default and, if such accountants are
aware that any such condition or event then exists, specifying
the nature and period of existence thereof, and
(b) they have reviewed the annual certificate of a
Senior Financial Officer of the Company provided pursuant to
clause (a) of Section 7.2 hereof and that they confirm the
calculations contained therein.
4 Inspection.
The Company and the Guarantor will permit, upon prior notice
to the Company, the representatives of each holder of Notes (at the
expense of the Company at any time when a Default or an Event of
Default has occurred and is in existence, and otherwise at the
expense of such holder) to visit and inspect any of the Properties
of the Company, the Guarantor or any other Subsidiary, to examine
all their respective books of account, records, reports and other
papers, to make copies and extracts therefrom and to discuss their
respective affairs, finances and accounts with their respective
officers, employees and independent public accountants (and by this
provision the Company and the Guarantor authorizes such accountants
to discuss the finances and affairs of the Company, the Guarantor
and the other Subsidiaries), all at such reasonable times and as
often as may be reasonably requested.
8. EVENTS OF DEFAULT
1 Nature of Events.
An "Event of Default" shall exist if any of the following
occurs and is continuing:
(a) Principal or Make-Whole Amount Payments -- the
Company shall fail to make any payment of principal or Make-
Whole Amount on any Note on or before the date such payment
is due;
(b) Interest Payments -- the Company shall fail to make
any payment of interest on any Note on or before the date such
payment is due;
(c) Certain Defaults -- the Company, the Guarantor or
any other Subsidiary shall fail to perform or observe any
covenant contained in Section 6.1 hereof, in Section 6.2(b)
hereof, in Section 7.1(a) through Section 7.1(h) hereof,
inclusive, or in Section 7.1(k) through Section 7.1(m) hereof,
inclusive, and such failure continues for more than ten (10)
days after the earlier of (i) receipt by the Company of
written notice thereof from any Purchaser or any other holder
of Notes, or (ii) such time as such failure shall otherwise
first become known to any officer of the Company or the
Guarantor;
(d) Other Defaults -- the Company, the Guarantor or any
other Subsidiary shall fail to perform, observe or comply with
any other term, covenant or agreement contained in this
Agreement, in the Notes or in any other document or instrument
delivered in connection herewith required to be performed by
the Company, the Guarantor or such other Subsidiary pursuant
to the terms of this Agreement, of the Notes or of such other
document or instrument;
(e) Warranties or Representations -- any warranty,
representation or other statement by or on behalf of the
Company or the Guarantor (or any of their respective officers)
contained herein or in any certificate or instrument furnished
in compliance with or in reference hereto shall have been
false or misleading in any material respect when made;
(f) Default on Indebtedness or Security --
(i) the Company, the Guarantor or any other
Subsidiary shall fail to make any payment on any
Indebtedness or any Security when due;
(ii) any event shall occur or any condition shall
exist in respect of any Indebtedness or any Security of
the Company, the Guarantor or any other Subsidiary, or
under any agreement securing or relating to any such
Indebtedness or Security, that immediately or with any
one or more of the passage of time or the giving of
notice:
(A) causes (or permits any holder thereof or
a trustee therefor to cause) such Indebtedness or
Security, or a portion thereof, to become due prior
to its stated maturity or prior to its regularly
scheduled date or dates of payment; or
(B) permits any one or more of the holders
thereof or a trustee therefor to require the
Company, the Guarantor or any other Subsidiary to
repurchase such Indebtedness or Security from such
holder and any such holder or trustee exercises (or
attempts to exercise) such right; or
(iii) any "Event of Default" shall have occurred
or shall exist under, and as defined in, the Bank Credit
Agreement, as amended and as in effect at such time;
(g) Involuntary Bankruptcy Proceedings --
(i) a receiver, liquidator, custodian or trustee
of the Company, the Guarantor or any other Subsidiary,
or of all or any part of the Property of any such Person,
shall be appointed by court order and such order shall
remain in effect for more than thirty (30) days, or an
order for relief shall be entered with respect to the
Company, the Guarantor or any other Subsidiary, or the
Company, the Guarantor or any other Subsidiary shall be
adjudicated a bankrupt or insolvent;
(ii) any of the Property of the Company, the
Guarantor or any other Subsidiary shall be sequestered
by court order and such order shall remain in effect for
more than thirty (30) days; or
(iii) a petition shall be filed against the
Company, the Guarantor or any other Subsidiary under any
bankruptcy, reorganization, arrangement, insolvency,
readjustment of debt, dissolution or liquidation law of
any jurisdiction, whether now or hereafter in effect, and
shall not be dismissed within thirty (30) days after such
filing;
(h) Voluntary Petitions -- the Company, the Guarantor
or any other Subsidiary shall file a petition in voluntary
bankruptcy or seeking relief under any provision of any
bankruptcy, reorganization, arrangement, insolvency,
readjustment of debt, dissolution or liquidation law of any
jurisdiction, whether now or hereafter in effect, or shall
consent to, or take any corporate action to authorize, the
filing of any petition against, or with respect to, any such
Person, under any such law;
(i) Assignments for Benefit of Creditors, etc. -- the
Company, the Guarantor or any other Subsidiary shall make an
assignment for the benefit of its creditors, or admit in
writing its inability, or fail, to pay its debts generally as
they become due, or shall consent to the appointment of a
receiver, liquidator or trustee of the Company, the Guarantor
or any other Subsidiary or of all or any part of the Property
of any such Person;
(j) Undischarged Final Judgments -- a final,
nonappealable judgment or final, nonappealable judgments for
the payment of money aggregating in excess of Two Million
Dollars ($2,000,000) is or are outstanding against any one or
more of the Company, the Guarantor or any other Subsidiary and
any one of such judgments shall have been outstanding for more
than ten (10) days from the date of its entry and shall not
have been discharged in full or stayed; or
(k) Unconditional Guaranty --
(i) the Unconditional Guaranty shall cease to be
in full force and effect or shall be declared by a court
or Governmental Authority of competent jurisdiction to
be void, voidable or unenforceable against the Guarantor;
(ii) the validity or enforceability of the
Unconditional Guaranty against the Guarantor shall be
contested by the Guarantor, or any subsidiary or
affiliate thereof; or
(iii) the Guarantor, or any subsidiary or
affiliate thereof, shall deny that the Guarantor has any
further liability or obligation under the Unconditional
Guaranty.
If any action, condition, event or other matter would, at any time,
constitute an Event of Default under any provision of this Section
8.1, then an Event of Default shall exist, regardless of whether
the same or a similar action, condition, event or other matter is
addressed in a different provision of this Section 8.1 and would
not constitute an Event of Default at such time under such
different provision.
2 Default Remedies.
(a) Termination of Note Purchase Facility; Acceleration
on Event of Default.
(i) If an Event of Default specified in clause (g),
clause (h) or clause (i) of Section 8.1 hereof shall
exist,
(A) the Note Purchase Facility provided
pursuant to the terms of this Agreement shall
automatically terminate in all respects and the
Purchasers shall not have any continuing obligations
pursuant to Section 1 of this Agreement, and
(B) all of the Notes at the time outstanding
shall automatically become immediately due and
payable together with interest accrued thereon and
the Make-Whole Amount (if any) in respect thereof,
in each case without presentment, demand, protest
or notice of any kind, all of which are hereby
expressly waived, and the Company shall forthwith
pay to the holder or holders of all the Notes then
outstanding the entire principal of and interest
accrued on the Notes and, to the extent permitted
by law, the Make-Whole Amount at such time with
respect to such principal amount of the Notes, and
all other amounts owing under this Agreement.
(ii) If an Event of Default other than those
specified in clause (g), clause (h) or clause (i) of
Section 8.1 hereof shall exist,
(A) any Purchaser may elect to terminate all
of its obligations in respect of the Note Purchase
Facility hereunder, and
(B) the Required Holders may exercise any
right, power or remedy permitted to such holder or
holders by law and shall have, in particular,
without limiting the generality of the foregoing,
the right to declare the entire principal of, and
all interest accrued on and Make-Whole Amount (if
any) in respect of, all the Notes then outstanding
to be, and such Notes shall thereupon become,
forthwith due and payable, without any presentment,
demand, protest or other notice of any kind, all of
which are hereby expressly waived, and the Company
shall forthwith pay to the holder or holders of all
the Notes then outstanding the entire principal of
and interest accrued on such Notes and, to the
extent permitted by law, the Make-Whole Amount at
such time with respect to such principal amount of
the Notes, and all other amounts owing under this
Agreement.
(b) Acceleration on Payment Default. During the
existence of an Event of Default described in Section 8.1(a)
or Section 8.1(b) hereof, and irrespective of whether the
Notes then outstanding shall have been declared to be due and
payable pursuant to Section 8.2(a)(ii) hereof, any holder of
Notes that shall have not consented to any waiver with respect
to such Event of Default may, at such holder's option, by
notice in writing to the Company, declare the Notes then held
by such holder to be, and such Notes shall thereupon become,
forthwith due and payable together with all interest accrued
thereon, and Make-Whole Amount (if any) in respect thereof,
without any presentment, demand, protest or other notice of
any kind, all of which are hereby expressly waived, and the
Company shall forthwith pay to such holder the entire
principal of and interest accrued on such Notes and, to the
extent permitted by law, the Make-Whole Amount at such time
with respect to such principal amount of such Notes and all
other amounts owing under this Agreement to such holder.
(c) Valuable Rights. The Company acknowledges, and the
parties hereto agree, that the right of each holder to
maintain its investment in the Notes free from repayment by
the Company (except as herein specifically provided for) is
a valuable right and that the provision for payment of a Make-
Whole Amount by the Company, in the event that the Notes are
prepaid or are accelerated as a result of an Event of Default
under certain circumstances, is intended to provide
compensation for the deprivation of such right under such
circumstances.
(d) Other Remedies; Remedies Cumulative; Nonwaiver.
During the existence of an Event of Default and irrespective
of whether the Note Purchase Facility shall have been
terminated pursuant to Section 8.2(a)(i) or Section 8.2(a)(ii)
hereof or whether the Notes then outstanding shall have been
declared to be due and payable pursuant to Section 8.2(a)(ii)
hereof and irrespective of whether any Purchaser or any other
holder of Notes then outstanding shall otherwise have pursued
or be pursuing any other rights or remedies, any Purchaser and
any other holder of Notes may proceed to protect and enforce
its rights hereunder and under such Notes by exercising such
remedies as are available to such holder in respect thereof
under applicable law, either by suit in equity or by action
at law, or both, whether for specific performance of any
agreement contained herein or in aid of the exercise of any
power granted herein, provided that the maturity of such
holder's Notes may be accelerated only in accordance with
Section 8.2(a) and Section 8.2(b) hereof. All rights and
remedies of each Purchaser and each other holder of Notes are
cumulative to, and not exclusive of, any rights or remedies
any such Purchaser or such other holder of Notes would
otherwise have. No course of dealing on the part of any
Purchaser or any other holder of Notes nor any delay or
failure on the part of any Purchaser or any other holder of
Notes to exercise any right shall operate as a waiver of such
right or otherwise prejudice such Purchaser's or such other
holder's rights, powers and remedies.
(e) Expenses. If the Company shall fail to pay when due
any principal of, or Make-Whole Amount or interest on, any
Note, or shall fail to comply with any other provision hereof,
the Company shall pay to each Purchaser and to each other
holder of Notes, to the extent permitted by law, such further
amounts as shall be sufficient to cover the costs and expenses
(including, but not limited to, reasonable attorneys' fees)
incurred by such Purchaser or such other holder in collecting
any sums due on such Notes or in otherwise assessing,
analyzing or enforcing any rights or remedies that are or may
be available to it.
3 Annulment of Acceleration of Notes.
If a declaration is made pursuant to Section 8.2(a)(ii)(B)
hereof, then and in every such case, the Required Holders may, by
written instrument filed with the Company, rescind and annul such
declaration and the consequences thereof, provided that at the time
such declaration is annulled and rescinded:
(a) no judgment or decree shall have been entered for
the payment of any moneys due on or pursuant hereto or the
Notes;
(b) all arrears of interest upon all the Notes and all
other sums payable hereunder and under the Notes (except any
principal of, or interest or Make-Whole Amount on, the Notes
that shall have become due and payable by reason of such
declaration under Section 8.2(a)(ii)(B) hereof) shall have
been duly paid; and
(c) each and every other Default and Event of Default
shall have been waived pursuant to Section 11.5 hereof or
otherwise made good or cured;
and provided further that no such rescission and annulment shall
extend to or affect any subsequent Default or Event of Default or
impair any right consequent thereon.
4 Restoration of Note Purchase Facility.
If the Note Purchase Facility shall have been terminated by
any Purchaser pursuant to Section 8.2(a)(ii) hereof, then and in
every such case, such Purchaser may, by written instrument filed
with the Company, rescind and annul such termination and the
consequences thereof.
9. INTERPRETATION OF THIS AGREEMENT
1 Terms Defined.
As used herein, the following terms have the respective
meanings set forth below or set forth in the Section of this
Agreement following such term:
Acceptable Control Persons -- means any members of the immediate family of,
or the respective heirs, executors or trustees holding for the sole
benefit of such heirs or members of the immediate family of, James
T. Hudson.
Acceptable Rating -- means a private placement rating of "PPR-
2" or higher from Standard & Poor's, or such other rating as may
from time to time be acceptable to the Company and the Purchasers.
Acceptance Notice -- Section 1.2(c)(ii).
Accepted Notes -- Section 1.2(c)(ii).
Affiliate -- means, at any time, a Person (other than a
Subsidiary)
(a) that directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under
common Control with, the Company,
(b) that beneficially owns or holds five percent (5%)
or more of any class of the Voting Stock of the Company,
(c) five percent (5%) or more of the Voting Stock (or
in the case of a Person that is not a corporation, five
percent (5%) or more of the equity interest) of which is
beneficially owned or held by the Company or a Subsidiary,
(d) that is an officer or director (or a member of the
immediate family of an officer or director) of the Company or
any Subsidiary, or
(e) that is an Acceptable Control Person, a natural
Person in any manner related by birth or marriage to any
Acceptable Control Person or a Person owned or Controlled by
any such Person,
at such time.
As used in this definition:
Control -- means the possession, directly or indirectly,
of the power to direct or cause the direction of the
management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
Aggregate Note Purchase Amount -- means Fifty Million Dollars
($50,000,000).
Agreement, this -- means this Note Purchase Agreement, as it
may be amended and restated from time to time.
Applicable Interest Rate -- shall mean, with respect to any
Series of Notes, the interest rate for such Series determined in
accordance with the terms and provisions of Section 1.2 hereof.
Applicable Net Income Carryover -- Section 6.6.
Applicable Overdue Payment Interest Rate -- means, with
respect to the Notes of any Series, the lesser of:
(a) the highest rate allowed by applicable law; and
(b) the sum of
(i) the Applicable Interest Rate with respect to
such Series, plus
(ii) two percent (2%) per annum.
Available Facility Amount -- means, at any time,
(a) the Aggregate Note Purchase Amount, minus
(b) an amount equal to (i) the aggregate principal
amount of Notes outstanding at such time plus (ii) the
aggregate principal amount of any Accepted Notes which have
not yet been issued at such time.
Average Life -- means, with respect to any determination of
the Applicable Interest Rate for any Offered Notes, the number of
years obtained by dividing
(a) the sum of the products obtained by multiplying
(i) the amount of each payment of principal of such
Offered Notes following the Closing Date with respect to
such Offered Notes, as identified in the Purchase Request
relating to such Offered Notes, by
(ii) the number of years (calculated to the nearest
one-twelfth) that will elapse between the proposed
Closing Date in respect of such Offered Notes and the
date each such payment of principal is to be due, by
(b) the aggregate principal amount of such Offered
Notes.
Bank of America -- means Bank of America National Trust and
Savings Association.
Bank Credit Agreement -- means the Revolving Credit Agreement,
dated as of April 26, 1994, by and among the Company, the Banks and
Rabobank, as agent, as the same shall have been amended, modified
or restated from time to time, and any substitute or replacement
credit facility in respect thereof.
Bank Security Documents -- means (a) the Amended and Restated
Security Agreement, dated as of September 23, 1992, among the
Company and Bank of America, as Collateral Agent, as the same shall
have been amended, modified or restated from time to time, (b) the
Amended and Restated Security Agreement, dated as of September 23,
1992, among the Guarantor and Bank of America, as Collateral Agent,
as the same shall have been amended, modified or restated from time
to time, and (c) all other security agreements, pledge agreements,
hypothecation agreements and documents and instruments securing the
obligations of the Company and the Guarantor under the Amended and
Restated Credit Agreement, dated as of September 23, 1992, among
the Company, the Guarantor, Bank of America and the other Banks
named therein.
Banks -- means each of Rabobank, Bank of America, NationsBank
of Texas, National Association, Caisse Nationale de Credit
Agricole, and Harris Trust and Savings Bank.
Board of Directors -- means the board of directors of the
Company or a Subsidiary, as applicable, or any committee thereof
that, in the instance, shall have the lawful power to exercise the
power and authority of such board of directors.
Business Day -- means, at any time, a day other than a
Saturday, a Sunday or a day on which the bank designated by the
holder of a Note to receive (for such holder's account) payments
on such Note is required by law (other than a general banking
moratorium or holiday for a period exceeding four (4) consecutive
days) to be closed.
Capital Expenditure -- Section 6.11.
Capital Lease -- means, at any time, a lease with respect to
which the lessee is required to recognize the acquisition of an
asset and the incurrence of a liability at such time in accordance
with GAAP.
Cash Flow Coverage Ratio -- Section 6.9.
Change in Control -- means, at any time:
(a) the failure of Acceptable Control Persons to
beneficially own, in the aggregate, at least fifty-one percent
(51%) (by number of votes) of the aggregate voting power in
respect of the Voting Stock of the Company outstanding at such
time; or
(b) the failure of Acceptable Control Persons to have
the power to elect or cause the election of at least fifty-
one percent (51%) of the members of the Board of Directors of
the Company at such time.
Closing -- Section 1.3(a).
Closing Date -- Section 1.2(b).
Company -- has the meaning assigned to such term in the
introductory sentence hereof.
Confirmation of Acceptance -- means, with respect to any
acceptance of a Rate Quote pursuant to an Acceptance Notice, a
written confirmation of such Acceptance Notice substantially in the
form of Exhibit C hereto.
Consolidated Indebtedness -- Section 6.8(c).
Consolidated Interest Expense -- Section 6.9.
Consolidated Lease Expense -- Section 6.9.
Consolidated Net Income -- Section 6.9.
Control Event -- means:
(a) the execution by the Company, any Subsidiary, any
Affiliate or any Acceptable Control Person of any letter of
intent or similar agreement with respect to any proposed
transaction or event or series of transactions or events that,
individually or in the aggregate, could reasonably be expected
to result in a Change in Control; or
(b) the execution of any written agreement that, when
fully performed by the parties thereto, would result in a
Change in Control.
Control Prepayment Date -- Section 4.3(a).
Credit Percentage Difference -- means an amount, expressed as
a percentage, by which an interest rate or yield of a debt
Security, issued by a Person other than the United States of
America, exceeds the interest rate or yield of a debt Security of
a comparable Average Life issued by the United States of America.
Credit Spread -- means, with respect to any determination of
the Applicable Interest Rate for any Offered Notes, a Credit
Percentage Difference, determined by the Person calculating such
Applicable Interest Rate in its sole and absolute discretion, that
is based on the Credit Percentage Difference then quoted by such
Person in connection with its proposed investments in unsecured
debt Securities issued by Persons having a credit standing and
financial performance similar to the credit standing and financial
performance of the Company at the time of such determination and
having an Average Life similar to the Offered Notes; provided that
the Credit Spread shall not exceed two percent (2%) if, at the time
of such determination, the Offered Notes shall have been given an
Acceptable Rating.
Default -- means an event or condition the occurrence of which
would, with the lapse of time or the giving of notice or both,
become an Event of Default.
Dollars or $ -- means United States of America dollars.
Environmental Protection Law -- means any federal, state,
county, regional or local law, statute or regulation (including,
without limitation, CERCLA, RCRA and SARA) enacted in connection
with or relating to the protection or regulation of the
environment, including, without limitation, those laws, statutes
and regulations regulating the disposal, removal, production,
storing, refining, handling, transferring, processing or
transporting of Hazardous Substances, and any regulations issued
or promulgated in connection with such statutes by any Governmental
Authority, and any orders, decrees or judgments issued by any court
of competent jurisdiction in connection with any of the foregoing.
As used in this definition:
CERCLA -- means the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended from time
to time (by SARA or otherwise), and all rules and regulations
promulgated in connection therewith.
RCRA -- means the Resource Conservation and Recovery Act
of 1976, as amended from time to time, and all rules and
regulations promulgated in connection therewith.
SARA -- means the Superfund Amendments and
Reauthorization Act of 1986, as amended from time to time, and
all rules and regulations promulgated in connection therewith.
ERISA -- means the Employee Retirement Income Security Act of
1974, as amended from time to time.
ERISA Affiliate -- means any corporation or trade or business
that:
(a) is a member of the same "controlled group of
corporations" (within the meaning of section 414(b) of the
IRC) as the Company; or
(b) is under "common control" (within the meaning of
section 414(c) of the IRC) with the Company.
Event of Default -- Section 8.1.
Exchange Act -- means the Securities Exchange Act of 1934, as
amended from time to time.
Facility Closing Date -- means May 18, 1994.
Facility Fee -- a fee paid to the Purchasers by the Company
in the amount of One Hundred Twenty-Five Thousand Dollars
($125,000).
Facility Termination Date -- means February 24, 1996.
Fair Market Value -- means, at any time, with respect to any
Property, the sale value of such Property that would be realized
in an arm's-length sale at such time between an informed and
willing buyer and an informed and willing seller under no
compulsion to buy or sell, respectively.
Fee Rebate Amount -- means, with respect to any Closing of the
issuance and sale of any Accepted Notes, an amount obtained by
multiplying (x) the Facility Fee by (y) a fraction, the numerator
of which is the aggregate amount of such Accepted Notes, and the
denominator of which is the Aggregate Note Purchase Amount.
GAAP -- means accounting principles as promulgated from time
to time in statements, opinions and pronouncements by the American
Institute of Certified Public Accountants and the Financial
Accounting Standards Board and in such statements, opinions and
pronouncements of such other entities with respect to financial
accounting of for-profit entities as shall be accepted by a
substantial segment of the accounting profession in the United
States of America.
Governmental Authority -- means:
(a) the government of
(i) the United States of America and any state
or other political subdivision thereof, or
(ii) any other jurisdiction (A) in which the
Company or any Subsidiary conducts all or any part
of its business or (B) that asserts jurisdiction
over the conduct of the affairs or Properties of the
Company or any Subsidiary; and
(b) any entity exercising executive, legislative,
judicial, regulatory or administrative functions of, or
pertaining to, any such government.
Guarantied Obligations -- Section 10.1(a).
Guarantor -- has the meaning assigned to such term in the
introductory sentence hereof.
Guaranty -- means, with respect to any Person (for the
purposes of this definition, the "General Guarantor"), any
obligation (except the endorsement in the ordinary course of
business of negotiable instruments for deposit or collection) of
the General Guarantor guaranteeing or in effect guaranteeing any
indebtedness, dividend or other obligation of any other Person (the
"Primary Obligor") in any manner, whether directly or indirectly,
including, without limitation, obligations incurred through an
agreement, contingent or otherwise, by the General Guarantor:
(a) to purchase such indebtedness or obligation or any
Property constituting security therefor;
(b) to advance or supply funds
(i) for the purpose of payment of such
indebtedness, dividend or other obligation, or
(ii) to maintain working capital or other balance
sheet condition or any income statement condition of the
Primary Obligor or otherwise to advance or make available
funds for the purchase or payment of such indebtedness,
dividend or other obligation;
(c) to lease Property or to purchase Securities or other
Property or services primarily for the purpose of assuring the
owner of such indebtedness or obligation of the ability of the
Primary Obligor to make payment of the indebtedness or
obligation; or
(d) otherwise to assure the owner of the indebtedness
or obligation of the Primary Obligor against loss in respect
thereof.
For purposes of computing the amount of any Guaranty in connection
with any computation of indebtedness or other liability, it shall
be assumed that the indebtedness or other liabilities that are the
subject of such Guaranty are direct obligations of the issuer of
such Guaranty.
Hazardous Substances -- means any and all pollutants,
contaminants, toxic or hazardous wastes and any other substances
that might pose a hazard to health or safety, the removal of which
may be required or the generation, manufacture, refining,
production, processing, treatment, storage, handling,
transportation, transfer, use, disposal, release, discharge,
spillage, seepage or filtration of which is or shall be, in each
of the foregoing cases, restricted, prohibited or penalized by any
applicable law.
Health Laws -- means any federal, state, county, regional or
local law, statute or regulation enacted in connection with, or
relating to, the processing, production, use, marketing or sale of
meat, poultry, feed and other food products (and any similar
businesses of the Company and the Subsidiaries), including, without
limitation, all regulations issued or promulgated in connection
with such laws and statutes by any Governmental Authority
(including, without limitation, the United States Department of
Agriculture and the United States Food and Drug Administration),
and any orders, decrees or judgments issued by any court of
competent jurisdiction in connection with any of the foregoing.
Hudson Poland -- means Hudson Foods Poland s.p. zo.o, a
limited liability company organized under the laws of Poland.
Indebtedness -- means, at any time, with respect to any
Person, without duplication:
(a) all indebtedness of such Person for borrowed money
or for the deferred purchase price of Property acquired by,
or services rendered to, such Person,
(b) all indebtedness of such Person created or arising
under any conditional sale or other title retention agreement
with respect to any Property acquired by such Person,
(c) the present value, determined in accordance with
GAAP, of all obligations of such Person under leases which
shall have been or should be recorded as Capital Leases in
accordance with GAAP,
(d) all indebtedness or other payment obligations for
the deferred purchase price of property or services secured
by any Lien upon or in any Property owned by such Person
whether or not such Person has assumed or become liable for
the payment of such indebtedness,
(e) indebtedness arising under acceptance facilities,
in connection with surety or other similar bonds, and the
undrawn maximum face amount of all outstanding letters of
credit issued for the account of such Person and, without
duplication, the outstanding amount of all drafts drawn
thereunder,
(f) obligations of such Person with respect to interest
rate protection agreements,
(g) all liabilities of such Person in respect of
unfunded vested benefits under Pension Plans and all asserted
withdrawal liabilities of such Person or a commonly controlled
entity to a Multiemployer Plan,
(h) all direct or indirect Guaranties by such Person of
indebtedness described in this definition of any other Person;
provided, that, for purposes of this definition, Trade Debt and
Operating Leases shall not be included.
As used in this definition:
Trade Debt -- means trade accounts payable incurred
in the ordinary course of business with an original
maturity or due date of not greater than one hundred
eighty (180) days from the creation thereof (and which
are not overdue for more than thirty (30) days).
Initial Closing Date -- means the date of the Closing of the
first issuance and sale of the Notes hereunder.
Initial Interest Period Termination Date -- means August 24,
1994.
Initial Interest Rate Period -- means the period beginning on
the Facility Closing Date and ending on the Initial Interest Period
Termination Date.
Initial Treasury Rate -- means, with respect to the
determination of the Applicable Interest Rate in respect of any
Series of Notes,
(a) the yield per annum reported as of 10:00 a.m., New
York City time, on the day on which such calculation is being
made, as the yield, based on the "bid" price, on the display
designated as "Page 678" on the Telerate Service (or such
other display as may replace Page 678 on the Telerate Service)
providing the most current yields for actively traded United
States Treasury securities with maturities corresponding to
the Initial Weighted Average Life, or
(b) if and only if such Telerate Service ceases to exist
or fails to report such yield, the yield per annum specified
under the heading "This Week" and under the caption "Treasury
Constant Maturities" of the maturity corresponding to the
Initial Weighted Average Life as most recently published and
made available to the public in the Statistical Release.
If no maturity exactly corresponds to the Initial Weighted Average
Life, yields for the two (2) most closely corresponding published
maturities next above and below the Initial Weighted Average Life
shall be calculated pursuant to the immediately preceding sentence
and the Initial Treasury Rate shall be interpolated from such
yields on a straight-line basis, rounding with respect to each such
relevant period to the nearest month.
Initial Weighted Average Life -- means five and sixty-three
one hundredths (5.63) years.
Institutional Investor -- means the Purchasers, any affiliate
of any of the Purchasers and any holder or beneficial owner of
Notes that is an "accredited investor" as defined in section 2(15)
of the Securities Act.
Intangible Assets -- Section 6.6.
Interpolated Treasury Rate -- means, with respect to the
determination of the Applicable Interest Rate in respect of any
Series of Notes,
(a) the yield per annum reported as of 10:00 a.m., New
York City time, on the day on which such calculation is being
made, as the yield, based on the "bid" price, on the display
designated as "Page 678" on the Telerate Service (or such
other display as may replace Page 678 on the Telerate Service)
providing the most current yields for actively traded United
States Treasury securities with maturities corresponding to
the Average Life of the Series of Notes then being issued
(such Average Life being determined as of the date of such
calculation and rounded to the nearest month), or
(b) if and only if such Telerate Service ceases to exist
or fails to report such yield, the yield per annum specified
under the heading "This Week" and under the caption "Treasury
Constant Maturities" of the maturity corresponding to the
Average Life of the Series of Notes then being issued (such
Average Life being determined as of the date of such
calculation and rounded to the nearest month) as most recently
published and made available to the public in the Statistical
Release.
If no maturity exactly corresponds to such Average Life, yields for
the two (2) most closely corresponding published maturities next
above and below such Average Life shall be calculated pursuant to
the immediately preceding sentence and the Interpolated Treasury
Rate shall be interpolated from such yields on a straight-line
basis, rounding with respect to each such relevant period to the
nearest month.
IRC -- means the Internal Revenue Code of 1986, together with
all rules and regulations promulgated pursuant thereto, as amended
from time to time.
IRS -- means the Internal Revenue Service and any successor
agency.
Leverage Ratio -- Section 6.8(a).
Lien -- means any interest in Property securing an obligation
owed to, or a claim by, a Person other than the owner of the
Property, whether such interest is based on the common law, statute
or contract, and including, but not limited to, the security
interest lien arising from a mortgage, encumbrance, pledge,
conditional sale, sale with recourse or a trust receipt, or a
lease, consignment or bailment for security purposes. The term
"Lien" includes, without limitation, reservations, exceptions,
encroachments, easements, rights-of-way, covenants, conditions,
restrictions, leases and other title exceptions and encumbrances
affecting real Property and includes, without limitation, with
respect to stock, stockholder agreements, voting trust agreements,
buy-back agreements and all similar arrangements. For the purposes
hereof, the Company and each Subsidiary shall be deemed to be the
owner of any Property that it shall have acquired or holds subject
to a conditional sale agreement, Capital Lease or other arrangement
pursuant to which title to the Property has been retained by or
vested in some other Person for security purposes, and such
retention or vesting is deemed a Lien. The term "Lien" does not
include negative pledge clauses in agreements relating to the
borrowing of money.
Make-Whole Amount -- means, with respect to any date (a
"Prepayment Date") and any principal amount ("Prepaid Principal")
of Notes of any Series required for any reason to be paid prior to
the regularly scheduled maturity thereof on such Prepayment Date,
the greater of
(a) Zero Dollars ($0), and
(b) (i) the sum of the present values of the then
remaining scheduled payments of principal and interest
(minus, in the case of the first of such interest
payments, and prior to determining the present value
thereof, the amount of interest accrued on such Prepaid
Principal since the scheduled interest payment date
immediately preceding such Prepayment Date) that would
be payable in respect of such Prepaid Principal but for
such prepayment, minus
(ii) such Prepaid Principal.
In determining such present values, a discount rate equal to the
Make-Whole Discount Rate with respect to such Prepayment Date and
Prepaid Principal divided by twelve (12), and a discount period of
one (1) month of thirty (30) days, shall be used.
Make-Whole Discount Rate -- means, with respect to any
Prepayment Date and Prepaid Principal, the Treasury Rate determined
as of such Prepayment Date.
As used in this definition:
Treasury Rate -- means, with respect to the calculation
of a Make-Whole Amount in respect of any prepayment or
acceleration of any Notes of any Series,
(a) the yield reported on the day on which such
calculation is being made, as the yield, based on the
"bid" price, on the display designated as "Page 678" on
the Telerate Service (or such other display as may
replace Page 678 on the Telerate Service) providing the
most current yields for actively traded United States
Treasury securities with maturities corresponding to the
remaining Weighted Average Life to Maturity of the
Prepaid Principal (such Weighted Average Life to Maturity
being determined as of the date of such calculation and
rounded to the nearest month), or
(b) if and only if the source of data described in
clause (a) ceases to exist or fails to report such yield,
a reasonably comparable electronic service as may be
designated by the Required Holders, or
(c) if and only if the source of data specified in
clause (a) of this definition ceases to exist or fails
to report such yield and the Required Holders shall fail
to agree upon a comparable electronic service pursuant
to clause (b) of this definition, such yield reported
under the heading "This Week" and under the caption
"Treasury Constant Maturities" of the maturity
corresponding to the remaining Weighted Average Life to
Maturity of the Prepaid Principal (such Weighted Average
Life to Maturity being determined as of the date of such
calculation and rounded to the nearest month) as most
recently published and made available to the public in
the statistical release designated "H.15(519)" or any
successor publication that is published weekly by the
Federal Reserve System and that establishes yields on
actively traded United States Treasury securities or, if
no such successor publication is available, then any
other source of current information in respect of
interest rates on the securities of the United States of
America that is generally available and, in the judgment
of the Required Holders, provides information reasonably
comparable to the H.15(519) statistical release.
If no maturity exactly corresponds to such rounded
Weighted Average Life to Maturity, yields for the two (2)
most closely corresponding published maturities next
above and below the rounded Weighted Average Life to
Maturity of the Prepaid Principal shall be calculated
pursuant to the immediately preceding sentence and the
Treasury Rate shall be interpolated from such yields on
a straight-line basis, rounding with respect to each such
relevant period to the nearest month.
Mandatory P/I Payment -- Section 4.1.
Margin Security -- means "margin stock" within the meaning of
Regulations G, T and X of the Board of Governors of the Federal
Reserve System, 12 C.F.R., Chapter II, as amended from time to
time.
Market Disruption -- means the occurrence of a general
suspension of, or material limitation in respect of, trading in
Securities generally on the New York Stock Exchange or in the
market for United States Governmental Securities and other
financial instruments.
Material Adverse Effect -- means a material adverse effect on
(a) the business, prospects, profits, Properties or
condition (financial or otherwise) of the Company and the
Subsidiaries, taken as a whole,
(b) the ability of the Company to perform its
obligations set forth in this Agreement and in the Notes,
(c) the ability of the Guarantor to perform its
obligations set forth in this Agreement, or
(d) the validity or enforceability of any of the terms
or provisions of this Agreement or the Notes.
Maturity Date -- Section 1.1(c).
Most Recent 10-K -- means the Company's Annual Report on Form
10-K for the fiscal year ended October 2, 1993, as filed with the
Securities and Exchange Commission.
Multiemployer Plan -- means any "multiemployer plan" (as
defined in section 3(37) of ERISA) in respect of which the Company
or any ERISA Affiliate is an "employer" (as such term is defined
in section 3 of ERISA).
Net Tangible Assets -- Section 6.12.
Note Purchase Facility -- Section 1.1(b).
Note Purchase Percentage -- means, with respect to any
Purchaser, the percentage of such Purchaser's allocation of the
Aggregate Note Purchase Amount specified below such Purchaser's
name on Annex 1 hereto.
Notes -- Section 1.1(a).
Offer Determination Date -- Section 4.3(b).
Offered Notes -- Section 1.2(b)(i).
Offering Proposal -- means the proposal letter, dated January
31, 1994, addressed to John Hancock Mutual Life Insurance Company
from the Placement Agent.
Ohse -- means Ohse Transportation, Inc., a Kansas corporation.
Operating Lease -- Section 6.9.
PBGC -- means the Pension Benefit Guaranty Corporation and any
successor corporation or governmental agency.
Pension Plan -- means, at any time, any "employee pension
benefit plan" (as such term is defined in section 3 of ERISA)
maintained at such time by the Company or any ERISA Affiliate for
employees of the Company or such ERISA Affiliate, excluding any
Multiemployer Plan.
Person -- means an individual, sole proprietorship,
partnership, corporation, trust, joint venture, unincorporated
organization, or a government or agency or political subdivision
thereof.
Placement Agent -- means Rabobank, in its capacity as
placement agent on behalf of the Company.
Prepaid Principal -- has the meaning assigned to such term in
the definition of "Make-Whole Amount" set forth in this Section
9.1.
Prepayment Date -- has the meaning assigned to such term in
the definition of "Make-Whole Amount" set forth in this Section
9.1.
Property -- means any interest in any kind of property or
asset, whether real, personal or mixed, and whether tangible or
intangible.
Purchase Request -- Section 1.2(a).
Purchaser Business Day -- means any day other than a day on
which the offices of any of the Purchasers are not open for
business.
Purchasers -- means each of the Persons identified on Annex
1 hereto as a purchaser of the Notes.
Rabobank -- means Cooperatieve Centrale Raiffeisen-
Boerenleenbank B.A. ("Rabobank Nederland"), New York Branch.
Rate Quote -- Section 1.2(c)(i).
Required Holders -- means, at any time, the holders of more
than sixty-six and two-thirds percent (66-2/3%) in principal amount
of the Notes at the time outstanding (exclusive of Notes then owned
by any one or more of the Company, any Subsidiary and any
Affiliate).
Required Purchasers -- means, at any time, the Purchaser or
Purchasers having at such time an aggregate Note Purchase
Percentage or Note Purchase Percentages set forth on Annex 1 hereto
of more than sixty-six and two-thirds percent (66-2/3%).
Securities Act -- means the Securities Act of 1933, as amended
from time to time.
Security -- means "security" as defined in section 2(1) of the
Securities Act.
Senior Financial Officer -- means the chief financial officer,
the principal accounting officer, the treasurer or the comptroller
of the Company.
Senior Officer -- means the chief executive officer, the chief
operating officer, the president, the chief financial officer, the
treasurer or the secretary of the Company.
Series -- means any or all of any series of Notes issued
hereunder.
Source -- Section 1.5(b).
Standard & Poor's -- means Standard & Poor's Corporation.
Statistical Release -- means, as of any date, United States
Federal Reserve Statistical Release H.15(519) or its successor
publication then most recently published and available to the
public or, if no such successor publication is available, then any
other source of current information in respect of interest rates
on securities of the United States of America that is generally
available and, in the judgment of the Required Purchasers, provides
information reasonably comparable to the H.15(519) report.
Subordinated Debt -- means, at any time, any unsecured
Indebtedness of the Company or a Subsidiary that is in any respect
subordinate or junior in right of payment or otherwise to the
Indebtedness evidenced by the Notes or to any other Indebtedness
of the Company or any Subsidiary.
Subsequent Interest Rate Period -- means the period beginning
on the calendar day immediately following the Initial Interest
Period Termination Date and ending on the Facility Termination
Date.
Subsidiary -- means, at any time,
(a) the Guarantor, and
(b) any other corporation of which the Company owns,
directly or indirectly, more than fifty percent (50%) (by
number of votes) of each class of the Voting Stock of such
corporation at such time.
Surviving Corporation -- Section 6.5(a).
Tangible Net Worth -- Section 6.6.
Total Subsidiary Indebtedness -- Section 6.8(c).
Transfers -- Section 6.5(c).
Unconditional Guaranty -- Section 10.1(a).
United States Governmental Securities -- means any direct
obligation of, or obligation guaranteed by, the United States of
America, or any agency controlled or supervised by or acting as an
instrumentality of the United States of America pursuant to
authority granted by the Congress of the United States of America,
in respect of the payment of which obligation or guarantee the full
faith and credit of the United States of America, pursuant to
authority granted by the Congress of the United States of America,
shall have been pledged.
Voting Stock -- means capital stock of any class or classes
of a corporation the holders of which are ordinarily, in the
absence of contingencies, entitled to elect corporate directors (or
Persons performing similar functions).
Weighted Average Life to Maturity -- means, with respect to
any date and principal amount of Indebtedness (including, without
limitation, with respect to any Prepayment Date and Prepaid
Principal), the number of years obtained by dividing (a) the
Remaining Dollar-Years with respect to such date and such principal
amount of Indebtedness by (b) such principal amount of
Indebtedness.
As used in this definition:
Remaining Dollar-Years -- means, with respect to any date
and principal amount of Indebtedness, the result obtained by
(a) multiplying an amount equal to each then
remaining required payment of principal (including
repayment at final maturity) of such Indebtedness unpaid
immediately prior to such date, by
(ii) the number of years (calculated to the
nearest one-twelfth (1/12)) that will elapse between
such date and the date each such required payment
of principal is due, and
(b) calculating the sum of each of the products
obtained in the preceding clause (a).
Wholly-Owned Subsidiary -- means, at any time, any Subsidiary
one hundred percent (100%) of all of the equity Securities (except
directors' qualifying shares) and voting Securities of which are
owned by any one or more of the Company and the other Wholly-Owned
Subsidiaries at such time.
2 GAAP.
Unless otherwise provided herein, all financial statements
delivered in connection herewith will be prepared in accordance
with GAAP as in effect on the date of, or during the period covered
by, such financial statement. Where the character or amount of any
asset or liability or item of income or expense, or any
consolidation or other accounting computation is required to be
made for any purpose hereunder, it shall be done in accordance with
GAAP as in effect on the date of, or at the end of the period
covered by, the financial statements from which such asset,
liability, item of income, or item of expense, is derived, or, in
the case of any such computation, as in effect on the date as of
which such computation is required to be determined, provided, that
if any term defined herein includes or excludes amounts, items or
concepts that would not be included in or excluded from such term
if such term were defined with reference solely to GAAP, such term
will be deemed to include or exclude such amounts, items or
concepts as set forth herein. Whenever a calculation based on the
consolidated financial position or consolidated results of
operations of a group of Persons is required hereby, investments
by members of the group in Persons which are excluded hereby from
such group shall be accounted for using the cost method.
3 Directly or Indirectly.
Where any provision herein refers to action to be taken by any
Person, or that such Person is prohibited from taking, such
provision shall be applicable whether such action is taken directly
or indirectly by such Person, including actions taken by or on
behalf of any partnership in which such Person is a general
partner.
4 Section Headings and Table of Contents and Construction.
(a) Section Headings and Table of Contents, etc. The
titles of the Sections of this Agreement and the Table of
Contents of this Agreement appear as a matter of convenience
only, do not constitute a part of this Agreement and shall not
affect the construction hereof. The words "herein," "hereof,"
"hereunder" and "hereto" refer to this Agreement as a whole
and not to any particular Section or other subdivision.
(b) Construction. Each covenant contained herein shall
be construed (absent an express contrary provision herein) as
being independent of each other covenant contained herein, and
compliance with any one covenant shall not (absent such an
express contrary provision) be deemed to excuse compliance
with one or more other covenants.
5 Governing Law.
THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, INTERNAL MASSACHUSETTS
LAW.
10. GUARANTY AND OTHER RIGHTS AND UNDERTAKINGS
1 Guarantied Obligations.
The Guarantor, in consideration of the execution and delivery
of this Agreement and the purchase of the Notes by each Purchaser,
hereby irrevocably, unconditionally and absolutely guarantees to
each holder of Notes, as and for the Guarantor's own debt, until
final and indefeasible payment has been made:
(a) the due and punctual payment by the Company of the
principal of, and interest, and the Make-Whole Amount (if any)
on, the Notes at any time outstanding and the due and punctual
payment of all other amounts payable, and all other
indebtedness owing, by the Company to the holders of the Notes
under this Agreement and the Notes (all such obligations so
guarantied are herein collectively referred to as the
"Guarantied Obligations"), in each case when and as the same
shall become due and payable, whether at maturity, pursuant
to mandatory or optional prepayment, by acceleration or
otherwise, all in accordance with the terms and provisions
hereof and thereof; it being the intent of the Guarantor that
the guaranty set forth in this Section 10.1 (the
"Unconditional Guaranty") shall be a guaranty of payment and
not a guaranty of collection; and
(b) the punctual and faithful performance, keeping,
observance, and fulfillment by the Company of all duties,
agreements, covenants and obligations of the Company contained
in this Agreement and the Notes.
2 Performance Under This Agreement.
In the event the Company fails to make, on or before the due
date thereof, any payment of the principal of, or interest or the
Make-Whole Amount (if any) on, the Notes or of any other amounts
payable, or any other indebtedness owing, to the holders of the
Notes under this Agreement or any of the Notes or if the Company
shall fail to perform, keep, observe, or fulfill any other
obligation referred to in clause (a) or clause (b) of Section 10.1
hereof in the manner provided in the Notes or in this Agreement
after in each case giving effect to any applicable grace periods
or cure provisions or waivers or amendments, the Guarantor shall
cause forthwith to be paid the moneys, or to be performed, kept,
observed, or fulfilled each of such obligations, in respect of
which such failure has occurred in accordance with the terms and
provisions of this Agreement and the Notes. In furtherance of the
foregoing, if an Event of Default shall exist, all of the
Guarantied Obligations shall, in the manner and subject to the
limitations provided herein for the acceleration of the Notes
(including, without limitation, the provisions related to the
annulment thereof), forthwith become due and payable without
notice, regardless of whether the acceleration of the Notes shall
be stayed, enjoined, delayed or otherwise prevented.
3 Waivers.
To the fullest extent permitted by law, the Guarantor does
hereby waive:
(a) notice of acceptance of the Unconditional Guaranty;
(b) notice of any purchase of the Notes under this
Agreement, or the creation, existence or acquisition of any
of the Guarantied Obligations, subject to the Guarantor's
right to make inquiry of each holder of Notes to ascertain the
amount of the Guarantied Obligations at any reasonable time;
(c) notice of the amount of the Guarantied Obligations,
subject to the Guarantor's right to make inquiry of each
holder of Notes to ascertain the amount of the Guarantied
Obligations at any reasonable time;
(d) notice of adverse change in the financial condition
of the Company or any other fact that might increase or expand
the Guarantor's risk hereunder;
(e) notice of presentment for payment, demand, protest,
and notice thereof as to the Notes or any other instrument;
(f) notice of any Default or Event of Default;
(g) all other notices and demands to which the Guarantor
might otherwise be entitled (except if such notice or demand
is specifically otherwise required to be given to the
Guarantor pursuant to the terms of this Agreement);
(h) the right by statute or otherwise to require any
Purchaser or other holder of Notes to institute suit against
the Company or any other Person or to exhaust the rights and
remedies of such Purchaser or any other holder of Notes
against the Company or any other Person, the Guarantor being
bound to the payment of each and all Guarantied Obligations,
whether now existing or hereafter accruing, as fully as if
such Guarantied Obligations were directly owing to the
Purchasers and the other holders of Notes by the Guarantor;
(i) any defense arising by reason of any disability or
other defense (other than the defense that the Guarantied
Obligations shall have been fully and finally performed and
indefeasibly paid) of the Company or by reason of the
cessation from any cause whatsoever of the liability of the
Company in respect thereof, and any other defense that the
Guarantor may otherwise have against the Company or any holder
of Notes; and
(j) any stay (except in connection with a pending
appeal), valuation, appraisal, redemption or extension law now
or at any time hereafter in force which, but for this waiver,
might be applicable to any sale of Property of the Guarantor
made under any judgment, order or decree based on this
Agreement, and the Guarantor covenants that it will not at any
time insist upon or plead, or in any manner claim or take the
benefit or advantage of such law.
4 Certain Waivers of Subrogation, Reimbursement and
Indemnity.
The Guarantor hereby acknowledges and agrees that
(a) the Guarantor shall not have any right of
subrogation, contribution, reimbursement, or indemnity
whatsoever in respect of the Guarantied Obligations, and no
right of recourse to or with respect to any assets or Property
of the Company,
(b) it will not file any claims against the Company or
the estate of the Company in the course of any proceeding
under any applicable bankruptcy or insolvency law in respect
of the rights referred to in this Section 10.4, and
(c) agrees that each holder of Notes may specifically
enforce the provisions of this Section 10.4.
Nothing shall discharge or satisfy the obligations of the
Guarantor hereunder except the full and final performance and
indefeasible payment of the Guarantied Obligations.
5 Releases.
The Guarantor consents and agrees that, without notice to or
by the Guarantor and without impairing, releasing, abating,
deferring, suspending, reducing, terminating or otherwise affecting
the obligations of the Guarantor hereunder, each holder of Notes,
in the manner provided herein, by action or inaction, may:
(a) compromise or settle, renew or extend the period of
duration or the time for the payment, or discharge the
performance of, or may refuse to, or otherwise not, enforce,
or may, by action or inaction, release all or any one or more
parties to, any one or more of the Notes or this Agreement;
(b) assign, sell or transfer, or otherwise dispose of,
any one or more of the Notes;
(c) grant waivers, extensions, consents and other
indulgences to the Company or any other Person in respect of
any one or more of the Notes or this Agreement;
(d) amend, modify or supplement in any manner and at any
time (or from time to time) any one or more of the Notes or
this Agreement in accordance with Section 11.5 hereof or
otherwise;
(e) release or substitute any one or more of the
endorsers or guarantors of the Guarantied Obligations whether
parties hereto or not;
(f) sell, exchange, release or surrender any Property
at any time pledged or granted as security in respect of the
Guarantied Obligations, whether so pledged or granted by the
Guarantor or another guarantor of the Company's obligations
under this Agreement and the Notes, and
(g) exchange, enforce, waive, or release, by action or
inaction, any security for the Guarantied Obligations or any
other guaranty of any of the Notes.
6 Marshaling.
The Guarantor consents and agrees that:
(a) no Purchaser or other holder of Notes shall be under
any obligation to marshal any assets in favor of the Guarantor
or against or in payment of any or all of the Guarantied
Obligations; and
(b) to the extent the Company or another Person makes
a payment or payments to any holder of Notes, which payment
or payments or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside, or
required, for any of the foregoing reasons or for any other
reason, to be repaid or paid over to a custodian, trustee,
receiver, or any other party under any bankruptcy law, common
law, or equitable cause, then to the extent of such payment
or repayment, the obligation or part thereof intended to be
satisfied thereby shall be revived and continued in full force
and effect as if said payment or payments had not been made
and the Guarantor shall be primarily liable for such
obligation.
7 Liability.
The Guarantor agrees that the liability of the Guarantor in
respect of this Section 10 shall be immediate and shall not be
contingent upon the exercise or enforcement by any Purchaser or any
other holder of Notes of whatever remedies any such Purchaser or
such other holder may have against the Company or any other Person
or the enforcement of any Lien or realization upon any security any
such Purchaser or such other holder may at any time possess.
8 Primary Obligation.
The Unconditional Guaranty set forth in this Section 10 is a
primary and original obligation of the Guarantor and is an
absolute, unconditional, continuing and irrevocable guaranty of
payment and performance and shall remain in full force and effect
(except as set forth in Section 10.16 hereof) until the full, final
and indefeasible payment of the Guarantied Obligations without
respect to future changes in conditions, including, without
limitation,
(a) change of law or any invalidity or irregularity with
respect to the issuance or assumption of any obligations
(including, without limitation, the Notes) of or by any of
the Company or the Guarantor, or with respect to the execution
and delivery of any agreement (including, without limitation,
the Notes and this Agreement) of or by any of the Company or
the Guarantor;
(b) the genuineness, validity, regularity or
enforceability of any of the Guarantied Obligations,
(c) any default, failure or delay, willful or otherwise,
in the performance of any obligations by the Company,
(d) any event or condition described in Section 10.5 of
this Agreement;
(e) the occurrence of any event or the existence of any
condition specified in Section 8.1(g), Section 8.1(h) or
Section 8.1(i) hereof with respect to the Company or any
Subsidiary;
(f) any change in the ownership of the Voting Stock or
other equity Securities of the Company or the Guarantor;
(g) impossibility or illegality of performance on the
part of the Company under this Agreement or the Notes;
(h) any change of the circumstances of the Company, the
Guarantor or any other Person, whether or not foreseen or
foreseeable, whether or not imputable to the Company or the
Guarantor, including, without limitation, impossibility of
performance through fire, explosion, accident, labor
disturbance, floods, droughts, embargoes, wars (whether or not
declared), civil commotions, acts of God or the public enemy,
delays or failure of suppliers or carriers, inability to
obtain materials, economic or political conditions, or any
other causes affecting performance, or any other force
majeure, whether or not beyond the control of the Company or
the Guarantor and whether or not of the kind hereinbefore
specified;
(i) any attachment, claim, demand, charge, lien, order,
process, encumbrance or any other happening or event or
reason, similar or dissimilar to the foregoing, or any
withholding or diminution at the source, by reason of any
taxes, assessments, expenses, indebtedness, obligations or
liabilities of any character, foreseen or unforeseen, and
whether or not valid, incurred by or against any Person, or
any claims, demands, charges, liens or encumbrances of any
nature, foreseen or unforeseen, incurred by any Person, or
against any sums payable under this Agreement or the Notes,
so that such sums would be rendered inadequate or would be
unavailable to make the payment herein provided;
(j) any order, judgment, decree, ruling or regulation
(whether or not valid) of any court of any nation or of any
political subdivision thereof or any body, agency, department,
official or administrative or regulatory agency of any nation
or any political subdivision thereof; or
(k) any other change or circumstance whatsoever.
9 Election to Perform Obligations.
Any election by the Guarantor to pay or otherwise perform any
of the obligations of the Company under the Notes or this
Agreement, whether pursuant to this Section 10 or otherwise, shall
not release the Company from such obligations or any of the
Company's other obligations under the Notes or this Agreement.
10 No Election.
Each Purchaser and each other holder of Notes shall,
individually or collectively, have the right to seek recourse
against the Guarantor to the fullest extent provided for herein for
the Guarantor's obligations under this Agreement (including,
without limitation, this Section 10) in respect of the Notes. No
election to proceed in one form of action or proceeding, or against
any party, or on any obligation, shall constitute a waiver of such
holder's right to proceed in any other form of action or proceeding
or against other parties unless such holder has expressly waived
such right in writing. Specifically, but without limiting the
generality of the foregoing, no action or proceeding by any
Purchaser or any other holder of Notes against the Company or the
Guarantor under any document or instrument evidencing obligations
of the Company or the Guarantor to such Purchaser or such other
holder of Notes shall serve to diminish the liability of the
Guarantor under this Agreement (including, without limitation, this
Section 10) except to the extent that such Purchaser or such other
holder of Notes finally and unconditionally shall have realized
payment by such action or proceeding, notwithstanding the effect
of any such action or proceeding upon the Guarantor's right of
subrogation against the Company.
11 Severability.
Subject to Section 8 hereof, each of the rights and remedies
granted under this Section 10 to each Purchaser and each other
holder of Notes in respect of the Notes held by such Purchaser or
such other holder may be exercised by such Purchaser or such other
holder without notice by such Purchaser or such other holder to,
or the consent of or any other action by, any other Purchaser or
any other holder of Notes.
12 Other Enforcement Rights.
Each Purchaser and each other holder of Notes may proceed, as
provided in Section 10.11 hereof, to protect and enforce the
Unconditional Guaranty by suit or suits or proceedings in equity,
at law or in bankruptcy, and whether for the specific performance
of any covenant or agreement contained herein (including, without
limitation, in this Section 10) or in execution or aid of any power
herein granted; or for the recovery of judgment for the obligations
hereby guarantied or for the enforcement of any other proper, legal
or equitable remedy available under applicable law. Each Purchaser
and each other holder of Notes shall have, to the fullest extent
permitted by law and this Agreement, a right of set-off against any
and all credits and any and all other Property of the Guarantor,
now or at any time whatsoever with, or in the possession of, such
Purchaser or such other holder, or anyone acting for such Purchaser
or such other holder, to ensure the full performance of any and all
obligations of the Guarantor hereunder.
13 Delay or Omission; No Waiver.
No course of dealing on the part of any Purchaser or any other
holder of Notes and no delay or failure on the part of any such
Person to exercise any right hereunder (including, without
limitation, this Section 10) shall impair such right or operate as
a waiver of such right or otherwise prejudice such Person's rights,
powers and remedies hereunder. Every right and remedy given by the
Unconditional Guaranty or by law to any Purchaser or any other
holder of Notes may be exercised from time to time as often as may
be deemed expedient by such Person.
14 Restoration of Rights and Remedies.
If any Purchaser or any other holder of Notes shall have
instituted any proceeding to enforce any right or remedy under the
Unconditional Guaranty, under any Note held by such Purchaser or
such other holder of Notes, and such proceeding shall have been
dismissed, discontinued or abandoned for any reason, or shall have
been determined adversely to such Purchaser or such other holder,
then and in every such case each such Purchaser and each such other
holder, the Company and the Guarantor shall, except as may be
limited or affected by any determination (including, without
limitation, any determination in connection with any such
dismissal) in such proceeding, be restored severally and
respectively to its respective former positions hereunder and
thereunder, and thereafter, subject as aforesaid, the rights and
remedies of such Purchasers and such other holders of Notes shall
continue as though no such proceeding had been instituted.
15 Cumulative Remedies.
No remedy under this Agreement (including, without limitation,
this Section 10) or the Notes is intended to be exclusive of any
other remedy, but each and every remedy shall be cumulative and in
addition to any and every other remedy given pursuant to this
Agreement (including, without limitation, this Section 10) or
pursuant to the Notes.
16 Survival.
So long as the Guarantied Obligations shall not have been
fully and finally performed and indefeasibly paid, the obligations
of the Guarantor under this Section 10 shall survive the transfer
and payment of any Note and the payment in full of all the Notes.
17 No Setoff, Counterclaim or Other Deduction.
Except as otherwise required by law, each payment by the
Guarantor shall be made without setoff, counterclaim or other
deduction.
18 Separate Instruments.
Notwithstanding that the Guarantor is a party to this
Agreement, the obligations of the Guarantor under this Section 10
shall be deemed to be contained in a separate instrument and any
invalidity or unenforceability of this Agreement in respect of the
Company shall not have any effect on the validity or enforceability
of this Agreement in respect of the Guarantor.
11. MISCELLANEOUS
1 Communications.
(a) Method; Address. All communications hereunder or
under the Notes shall be in writing, shall be hand delivered,
deposited into the United States mail (registered or certified
mail), postage prepaid, sent by overnight courier or sent by
facsimile transmission (confirmed by delivery by overnight
courier) and shall be addressed,
(i) if to the Company,
Hudson Foods, Inc.
1225 Hudson Road
Rogers, Arkansas 72756
Attention: Charles B. Jurgensmeyer, Chief
Financial Officer and
Executive Vice President, and Tommy
D. Reynolds,
Secretary and Treasurer
Telephone: (501) 636-1100
Facsimile: (501) 631-5400,
or at such other address as the Company shall have furnished
in writing to each Purchaser and all other holders of the
Notes at the time outstanding,
(ii) if to the Guarantor:
Hudson Farms, Inc.
c/o Hudson Foods, Inc.
1225 Hudson Road
Rogers, Arkansas 72756
Attention: Charles B. Jurgensmeyer, Chief
Financial Officer and
Executive Vice President, and Tommy
D. Reynolds,
Secretary and Treasurer
Telephone: (501) 636-1100
Facsimile: (501) 631-5400,
or at such other address as the Guarantor shall have furnished
in writing to each Purchaser and all other holders of the
Notes at the time outstanding,
(iii) if to any of the Purchasers in respect of
any matter relating to Section 1 hereof, at their
respective addresses set forth on Annex 1 hereto, and
further including any parties referred to on such Annex
1 that are required to receive notices in addition to
such Purchasers, or to any other Person at such other
address as such Purchaser may designate by notice duly
given in accordance with this Section 11.1 to the
Company, and
(iv) if to any of the holders of the Notes,
IST if such holders are the Purchasers, at
their respective addresses set forth on Annex 1
hereto, and further including any parties referred
to on such Annex 1 that are required to receive
notices in addition to such holders of the Notes,
and
(B) if such holders are not the Purchasers,
at their respective addresses set forth in the
register for the registration and transfer of Notes
maintained pursuant to Section 5.1 hereof,
or to any such party at such other address as such party may
designate by notice duly given in accordance with this Section
11.1 to the Company (which other address shall be entered in
such register).
(b) When Given. Any communication properly addressed
and sent in accordance with Section 11.1(a) hereof shall be
deemed to be received when actually received at the address
of the addressee.
2 Reproduction of Documents.
This Agreement and all documents relating hereto, including,
without limitation,
(a) consents, waivers and modifications that may
hereafter be executed,
(b) documents received by each of you at any closing of
your purchase of any Series of the Notes (except the Notes
themselves), and
(c) financial statements, certificates and other
information previously or hereafter furnished to any Purchaser
or any other holder of Notes,
may be reproduced by any holder of Notes by any photographic,
photostatic, microfilm, micro-card, miniature photographic, digital
or other similar process and each holder of Notes may destroy any
original document so reproduced. The Company agrees and stipulates
that any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding
(whether or not the original is in existence and whether or not
such reproduction was made by such holder of Notes in the regular
course of business) and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in
evidence. Nothing in this Section 11.2 shall prohibit the Company
or any holder of Notes from contesting the validity or the accuracy
of any such reproduction.
3 Survival.
All warranties, representations, certifications and covenants
made by the Company or the Guarantor herein or in any certificate
or other instrument delivered by any such Person or on behalf of
any such Person hereunder shall be considered to have been relied
upon by each of you and shall survive the delivery to each of you
of the Notes regardless of any investigation made by you or on your
behalf. All statements in any such certificate or other instrument
shall constitute warranties and representations by the Company or
the Guarantor, as the case may be, hereunder.
4 Successors and Assigns.
(a) Successors and Assigns. This Agreement shall inure
to the benefit of and be binding upon the successors and
assigns of each of the parties hereto. The provisions hereof
are intended to be for the benefit of all holders, from time
to time, of Notes, and shall be enforceable by any such
holder, whether or not an express assignment to such holder
of rights hereunder shall have been made by any Purchaser or
any Purchaser's successor or assign.
(b) Note Purchase Facility. Notwithstanding any of the
provisions of Section 11.4(a) hereof or any other provision
of this Agreement, no transfer or assignment of any of the
Notes by any Purchaser shall operate as a transfer or
assignment of such Purchaser's obligations in respect of the
Note Purchase Facility unless such Purchaser and any
transferee or assignee of such Notes shall enter into an
express written agreement to such effect.
5 Amendment and Waiver.
(a) General Requirements. This Agreement may be
amended, and the observance of any term hereof may be waived,
with (and only with) the written consent of the Company, the
Required Holders and, at all times prior to the termination
of the Note Purchase Facility pursuant to the terms of this
Agreement, the Required Purchasers, provided that
(i) no such amendment or waiver shall, without the
written consent of the holders of all Notes (exclusive
of Notes held by the Company, any Subsidiary or any
Affiliate) at the time outstanding,
(A) subject to Section 8 hereof, change the
amount or time of any prepayment or payment of
principal or Make-Whole Amount or the rate or time
of payment of interest,
(B) amend Section 6.18 or Section 8 hereof,
(C) amend the definition of "Required
Holders," or
(D) amend this Section 11.5; and
(ii) no amendment or waiver of any of the provisions
of Section 1 through Section 4 hereof, inclusive, or any
defined term used therein, shall be effective as to any
Purchaser unless agreed and consented to by such
Purchaser in writing.
(b) Solicitation.
(i) Solicitation. The Company shall not solicit,
request or negotiate for or with respect to any proposed
waiver or amendment of any of the provisions hereof or
the Notes unless each Purchaser and each other holder of
the Notes (irrespective of the amount of Notes then owned
by it) shall be provided by the Company with sufficient
information to enable it to make an informed decision
with respect thereto. Executed or true and correct
copies of any waiver or consent effected pursuant to the
provisions of this Section 11.5 shall be delivered by the
Company to each Purchaser and each other holder of
outstanding Notes forthwith following the date on which
the same shall have been executed and delivered by all
holders of outstanding Notes required to consent or agree
to such waiver or consent.
(ii) Payment. The Company shall not, directly or
indirectly, pay or cause to be paid any remuneration,
whether by way of supplemental or additional interest,
fee or otherwise, or grant any security, to any Purchaser
or any other holder of Notes as consideration for or as
an inducement to the entering into by any holder of Notes
of any waiver or amendment of any of the terms and
provisions hereof unless such remuneration is
concurrently paid, or security is concurrently granted,
ratably to all of the Purchasers and the other holders
of all Notes then outstanding.
(iii) Scope of Consent. Any consent made
pursuant to this Section 11.5 by a holder of Notes that
has transferred or has agreed to transfer its Notes to
the Company, any Subsidiary or any Affiliate and has
provided or has agreed to provide such written consent
as a condition to such transfer shall be void and of no
force and effect except solely as to such holder, and any
amendments effected or waivers granted or to be effected
or granted that would not have been or would not be so
effected or granted but for such consent (and the
consents of all other holders of Notes that were acquired
under the same or similar conditions) shall be void and
of no force and effect, retroactive to the date such
amendment or waiver initially took or takes effect,
except solely as to such holder.
(c) Binding Effect. Except as provided in Section
11.5(a) and Section 11.5(b)(iii) hereof, any amendment or
waiver consented to as provided in this Section 11.5 shall
apply equally to all Purchasers and all other holders of Notes
and shall be binding upon them and upon each future holder of
any Note and upon the Company whether or not such Note shall
have been marked to indicate such amendment or waiver. No
such amendment or waiver shall extend to or affect any
obligation, covenant, agreement, Default or Event of Default
not expressly amended or waived or impair any right consequent
thereon.
6 Expenses.
The Company shall pay when billed
(a) all expenses incurred by any Purchaser and any other
holder of Notes in connection with the enforcement of any
rights under this Agreement and the Notes (including, without
limitation, all fees and expenses of such Purchaser's or such
other holder's special counsel), and
(b) all expenses relating to the consideration,
negotiation, preparation or execution of any amendments,
waivers or consents pursuant to Section 11.5 and the other
terms and provisions hereof, whether or not any such
amendments, waivers or consents are executed, including,
without limitation any amendments, waivers or consents
resulting from any work-out, restructuring or similar
proceedings relating to the performance by the Company of its
obligations under this Agreement or the Notes.
7 Payments on Notes.
(a) Manner of Payment. The Company shall pay all
amounts payable with respect to each Note (without any
presentment of such Notes and without any notation of such
payment being made thereon) by crediting, by federal funds
bank wire transfer, the account of the holder thereof in any
bank in the United States of America as may be designated in
writing by such holder, or in such other manner as may be
reasonably directed or to such other address in the United
States of America as may be reasonably designated in writing
by such holder. Annex 1 hereto shall be deemed to constitute
notice, direction or designation (as appropriate) to the
Company with respect to payments as aforesaid. In the absence
of such written direction, all amounts payable with respect
to each Note shall be paid by check mailed and addressed to
the registered holder of such Note at the address shown in the
register maintained by the Company pursuant to Section 5.1
hereof.
(b) Payments Due on Holidays. If any payment due on,
or with respect to, any Note shall fall due on a day other
than a Business Day, then such payment shall be made on the
first Business Day following the day on which such payment
shall have so fallen due.
(c) Payments, When Received. Any payment to be made to
the holders of Notes hereunder or under the Notes shall be
deemed to have been made on the Business Day such payment
actually becomes available to such holder at such holder's
bank prior to 11:00 a.m. (local time of such bank).
8 Jurisdiction; Service of Process.
THE COMPANY AND THE GUARANTOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY AGREE THAT ANY SUIT, ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR THE NOTES, OR ANY ACTION
OR PROCEEDING TO EXECUTE OR OTHERWISE ENFORCE ANY JUDGMENT IN
RESPECT OF ANY BREACH HEREUNDER OR UNDER THE NOTES, BROUGHT BY ANY
PURCHASER OR ANY OTHER REGISTERED HOLDER OF A NOTE AGAINST THE
COMPANY, THE GUARANTOR OR ANY OF THEIR RESPECTIVE PROPERTY, MAY BE
BROUGHT BY SUCH PERSON IN THE COURTS OF THE UNITED STATES DISTRICT
COURT FOR THE DISTRICT OF MASSACHUSETTS OR ANY STATE COURT SITTING
IN BOSTON, MASSACHUSETTS, AS SUCH PURCHASER OR OTHER REGISTERED
HOLDER OF A NOTE MAY IN ITS SOLE DISCRETION ELECT, AND BY THE
EXECUTION AND DELIVERY OF THIS AGREEMENT, THE COMPANY AND THE
GUARANTOR IRREVOCABLY AND UNCONDITIONALLY SUBMIT TO THE NON-
EXCLUSIVE IN PERSONAM JURISDICTION OF EACH SUCH COURT, AND AGREE
THAT PROCESS SERVED EITHER PERSONALLY OR BY REGISTERED MAIL SHALL
CONSTITUTE, TO THE EXTENT PERMITTED BY LAW, ADEQUATE SERVICE OF
PROCESS IN ANY SUCH SUIT, AND THE COMPANY AND THE GUARANTOR
IRREVOCABLY WAIVE AND AGREE NOT TO ASSERT, BY WAY OF MOTION, AS A
DEFENSE OR OTHERWISE, ANY CLAIM THAT SUCH PERSON IS NOT SUBJECT TO
THE IN PERSONAM JURISDICTION OF ANY SUCH COURT. RECEIPT OF PROCESS
SO SERVED SHALL BE CONCLUSIVELY PRESUMED AS EVIDENCED BY A DELIVERY
RECEIPT FURNISHED BY THE UNITED STATES POSTAL SERVICE OR ANY
COMMERCIAL DELIVERY SERVICE. IN ADDITION, THE COMPANY AND THE
GUARANTOR HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED
BY LAW, ANY OBJECTION THAT SUCH PERSON MAY NOW OR HEREAFTER HAVE
TO THE LAYING OF VENUE IN ANY SUIT, ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT AND/OR THE NOTES, BROUGHT IN
SUCH COURTS, AND HEREBY IRREVOCABLY WAIVE ANY CLAIM THAT ANY SUCH
SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. NOTHING HEREIN SHALL IN ANY WAY
BE DEEMED TO LIMIT THE ABILITY OF ANY PURCHASER OR OTHER REGISTERED
HOLDER OF A NOTE TO SERVE ANY SUCH WRITS, PROCESS OR SUMMONSES IN
ANY MANNER PERMITTED BY APPLICABLE LAW OR TO OBTAIN JURISDICTION
OVER THE COMPANY OR THE GUARANTOR IN SUCH OTHER JURISDICTION, AND
IN SUCH MANNER, AS MAY BE PERMITTED BY APPLICABLE LAW. THE COMPANY
AND THE GUARANTOR AGREE THAT A FINAL JUDGMENT IN ANY SUCH ACTION
OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW.
9 Entire Agreement.
This Agreement constitutes the final written expression of all
of the terms hereof and is a complete and exclusive statement of
those terms.
10 Duplicate Originals, Execution in Counterpart.
Two (2) or more duplicate originals hereof may be signed by
the parties, each of which shall be an original but all of which
together shall constitute one and the same instrument. This
Agreement may be executed in one or more counterparts and shall be
effective when at least one counterpart shall have been executed
by each party hereto, and each set of counterparts that,
collectively, show execution by each party hereto shall constitute
one duplicate original.
[Remainder of page intentionally blank; next page is signature page.]<PAGE>
If this
Agreement is satisfactory to you, please so indicate
by signing the acceptance at the foot of a counterpart hereof and
returning such counterpart to the Company and the Guarantor,
whereupon this Agreement shall become binding between us in
accordance with its terms.
Very truly yours,
HUDSON FOODS, INC.
By /s/ Tommy D. Reynolds
Name: Tommy D. Reynolds
Title: Secretary/Treasurer
HUDSON FARMS, INC.
By /s/ Tommy D. Reynolds
Name: Tommy D. Reynolds
Title: Secretary/Treasurer
Accepted:
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
By /s/ David E. Johnson
Name: David E. Johnson
Title: Investment Officer
JOHN HANCOCK LIFE INSURANCE COMPANY OF AMERICA
By /s/ John P. Shea
Name: John P. Shea
Title: Vice President
<PAGE>
ANNEX 1
INFORMATION AS TO PURCHASERS
Purchaser NameJOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY GENERAL
ACCOUNTName in Which Notes are to be RegisteredJohn Hancock Mutual
Life Insurance CompanyNote Purchase Percentage56%Address for
Delivery of Purchase RequestsJohn Hancock Mutual Life Insurance
Company
John Hancock Place
200 Clarendon Street
Boston, MA 02117
Attention: Securities Accounting Division T-10Name and Telephone
Number of Person to be contacted in respect of Purchase
RequestsWilliam H. Hasson
Telephone: (214) 880-9044
Fax: (214) 922-8105Payment on Account of Note
Method
Account Information
Federal Funds Wire Transfer
The First National Bank of Boston
ABA No. 011000390
Boston, Massachusetts 02110
Account of John Hancock Mutual Life Insurance Company
Private Placement Collection Account
Account No. 541-55417
On Order of: Hudson Foods, Inc. [Insert PPN No. with respect to
Series of Notes being paid]Address for Notices Related to
PaymentsJohn Hancock Mutual Life Insurance Company
John Hancock Place
200 Clarendon Street
Boston, MA 02117
Attention: Securities Accounting Division T-10Information to
Accompany Payments and Notices Related to PaymentsName of Company:
Hudson Foods, Inc.
Description of
Security: Fixed Rate Senior Notes
PPN: [Insert PPN No. with respect to Series of Notes
being paid]
Due Date and Application (as among principal, premium and interest)
of the payment being made:
Name and address of Bank (or Trustee) from which wire transfer was
sentAddress for All other NoticesJohn Hancock Mutual Life Insurance
Company
John Hancock Place
200 Clarendon Street
Boston, MA 02117
Attention: Bond and Corporate Finance Dept. T-57Name of Investment
Officer and Telephone Number for Notices to be delivered in
accordance with Section 4.3(a)William H. Hasson
Telephone: (214) 880-9044
Fax: (214) 922-8105Tax Identification Number04-1414660
<PAGE>
Purchaser NameJOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY GUARANTEED
BENEFIT SUB-ACCOUNTName in Which Notes are to be RegisteredJohn
Hancock Mutual Life Insurance CompanyNote Purchase
Percentage38%Address for Delivery of Purchase RequestsJohn Hancock
Mutual Life Insurance Company
John Hancock Place
200 Clarendon Street
Boston, MA 02117
Attention: Securities Accounting Division T-10Name and Telephone
Number of Person to be contacted in respect of Purchase
RequestsWilliam H. Hasson
Telephone: (214) 880-9044
Fax: (214) 922-8105Payment on Account of Note
Method
Account Information
Federal Funds Wire Transfer
The First National Bank of Boston
ABA No. 011000390
Boston, Massachusetts 02110
Account of John Hancock Mutual Life Insurance Company
Private Placement Collection Account
Account No. 541-55417
On Order of: Hudson Foods, Inc. [Insert PPN No. with respect to
Series of Notes being paid]Address for Notices Related to
PaymentsJohn Hancock Mutual Life Insurance Company
John Hancock Place
200 Clarendon Street
Boston, MA 02117
Attention: Securities Accounting Division T-10Information to
Accompany Payments and Notices Related to PaymentsName of Company:
Hudson Foods, Inc.
Description of
Security: Fixed Rate Senior Notes
PPN: [Insert PPN No. with respect to Series of Notes
being paid]
Due Date and Application (as among principal, premium and interest)
of the payment being made:
Name and address of Bank (or Trustee) from which wire transfer was
sentAddress for All other NoticesJohn Hancock Mutual Life Insurance
Company
John Hancock Place
200 Clarendon Street
Boston, MA 02117
Attention: Bond and Corporate Finance Dept. T-57Name of Investment
Officer and Telephone Number for Notices to be delivered in
accordance with Section 4.3(a)William H. Hasson
Telephone: (214) 880-9044
Fax: (214) 922-8105Tax Identification Number04-1414660
<PAGE>
Purchaser NameJOHN HANCOCK LIFE INSURANCE COMPANY OF AMERICAName
in Which Notes are to be RegisteredJohn Hancock Life Insurance
Company of AmericaNote Purchase Percentage6%Address for Delivery
of Purchase RequestsJohn Hancock Mutual Life Insurance Company
John Hancock Place
200 Clarendon Street
Boston, MA 02117
Attention: Securities Accounting Division T-10Name and Telephone
Number of Person to be contacted in respect of Purchase
RequestsWilliam H. Hasson
Telephone: (214) 880-9044
Fax: (214) 922-8105Payment on Account of Note
Method
Account Information
Federal Funds Wire Transfer
The First National Bank of Boston
ABA No. 011000390
Boston, Massachusetts 02110
Account of John Hancock Mutual Life Insurance Company
Private Placement Collection Account
Account No. 541-55417
On Order of: Hudson Foods, Inc. [Insert PPN No. with respect to
Series of Notes being paid]Address for Notices Related to
PaymentsJohn Hancock Mutual Life Insurance Company
John Hancock Place
200 Clarendon Street
Boston, MA 02117
Attention: Securities Accounting Division T-10Information to
Accompany Payments and Notices Related to PaymentsName of Company:
Hudson Foods, Inc.
Description of
Security: Fixed Rate Senior Notes
PPN: [Insert PPN No. with respect to Series of Notes
being paid]
Due Date and Application (as among principal, premium and interest)
of the payment being made:
Address for All other NoticesJohn Hancock Mutual Life Insurance
Company
John Hancock Place
200 Clarendon Street
Boston, MA 02117
Attention: Bond and Corporate Finance Dept. T-57Name of Investment
Officer and Telephone Number for Notices to be delivered in
accordance with Section 4.3(a)William H. Hasson
Telephone: (214) 880-9044
Fax: (214) 922-8105Tax Identification Number13-3072894
<PAGE>
ANNEX 2
INFORMATION AS TO COMPANY AND SUBSIDIARIES
[INFORMATION TO BE SUPPLIED BY COMPANY]
2.2(a). Financial Statements.
1. The consolidated balance sheets of the Company and
its consolidated subsidiaries as of October 2, 1993, October
3, 1992, [_________ __, 1991], [________ __, 1990], and
[__________ __, 1989], and the related consolidated statements
of cash flows, consolidated statements of operations and
consolidated statements of stockholders' equity for the fiscal
years ended on such dates, all accompanied by opinions thereon
by Coopers & Lybrand, independent certified public
accountants.
(b) [Insert Quarterly Financial Information, if any]
2.2(b). Indebtedness.
[To be provided by the Company].
2.3. Subsidiaries and Affiliates.
[To be provided by the Company].
2.5(a). Tax Returns.
[To be provided by the Company].
2.8(d). Foreign Jurisdictions.
[To be provided by the Company].
2.10(b). Restrictions on Company and Subsidiaries.
[To be provided by the Company].
2.17(b). Transactions Prior to Facility Closing Date.
[To be provided by the Company].
<PAGE>
ANNEX 3
INFORMATION AS TO BUSINESS COVENANTS
6.1 Existing Taxes and Claims.
[Company to provide description of the tax audit disclosed in
footnote 7 of the Company's consolidated financial statements
for the year ended October 2, 1993]
6.4(a)(vi). Existing Liens.
[To be provided by the Company].
6.8(c). Existing Subsidiary Indebtedness.
[To be provided by the Company].
6.8(d). Existing Liabilities.
[To be provided by the Company]
<PAGE>
EXHIBIT A
[FORM OF NOTE]
HUDSON FOODS, INC.
Fixed Rate Senior Note
Series [__]
No. R-__
$________ _________ __, ____
Maturity Date: [________ __, ____]
PPN: [_________]
HUDSON FOODS, INC. (the "Company"), a Delaware corporation,
for value received, hereby promises to pay to ______ or registered
assigns the principal sum of ______ DOLLARS ($______), and to pay
interest (computed on the basis of a 360-day year of twelve 30-
day months) on the unpaid principal balance thereof from the date
of this Note at the rate of [__________________] percent ([_____]%)
per annum, monthly on the first (1st) day of each month in each
year, commencing on the date set forth on Schedule 1 hereto, until
the principal amount hereof shall become due and payable by making
equal monthly payments comprised of interest and principal in the
amount determined in accordance herewith; and to pay on demand
interest on any overdue principal (including any overdue prepayment
of principal) and Make-Whole Amount, if any, and (to the extent
permitted by applicable law) on any overdue installment of
interest, at a rate equal to the Applicable Overdue Payment
Interest Rate.
The balance of principal and all interest accrued thereon and
other sums due hereunder shall be paid in full on the Maturity Date
set forth above as determined in accordance with Section 1.1(c) of
the Note Purchase Agreement. The equal monthly installments of
principal and interest on this Note shall be in an amount equal to
a ratable portion of the Mandatory P/I Payments set forth on
Schedule 1 to this Note, as determined in accordance with Section
4.4(a) of the Note Purchase Agreement. Each such monthly payment
shall be applied first to the payment in full of accrued interest
then due on the unpaid principal balance of this Note, and any
balance of any such payment shall be applied to the payment of
principal of this Note.
Payments of principal, Make-Whole Amount, if any, and interest
shall be made in such coin or currency of the United States of
America as at the time of payment is legal tender for the payment
of public and private debts to the registered holder hereof, at the
address shown in the register maintained by the Company for such
purpose, in the manner provided in the Note Purchase Agreement
(defined below).
This Note is one of the Series [__] Fixed Rate Senior Notes
of the Company to be issued, together with other Series of Notes,
in an aggregate principal amount, for all such Series, limited to
Fifty Million Dollars ($50,000,000) pursuant to the Note Purchase
Agreement (as may be amended from time to time, the "Note Purchase
Agreement"), dated as of May 18, 1994, among the Company, Hudson
Farms, Inc., an Arkansas corporation, and the purchasers listed on
Annex 1 thereto, and is entitled to the benefits thereof.
Capitalized terms used herein and not otherwise defined herein have
the meanings specified in the Note Purchase Agreement. As provided
in the Note Purchase Agreement, this Note is subject to prepayment,
in whole or in part, in certain cases without a Make-Whole Amount
and in other cases with a Make-Whole Amount. The Company agrees
to make required payments and prepayments on account of the Notes
in accordance with the provisions of the Note Purchase Agreement.
This Note is a registered Note and is transferable only by
surrender hereof at the principal office of the Company as
specified in the Note Purchase Agreement, duly endorsed or
accompanied by a written instrument of transfer duly executed by
the registered holder of this Note or its attorney duly authorized
in writing.
Under certain circumstances, as specified in the Note Purchase
Agreement, the principal of this Note (together with any applicable
Make-Whole Amount) may be declared due and payable in the manner
and with the effect provided in the Note Purchase Agreement.
THIS NOTE AND THE NOTE PURCHASE AGREEMENT ARE GOVERNED BY, AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, INTERNAL
MASSACHUSETTS LAW.
HUDSON FOODS, INC.
By____________________________
____
Name:
Title:
<PAGE>
The payment by the Company of all amounts due with respect to
this Note and the Note Purchase Agreement and the performance by
the Company of all of its obligations under the Note Purchase
Agreement have been unconditionally guarantied by the undersigned
pursuant to Section 10 of the Note Purchase Agreement, which
guaranty is hereby incorporated herein by reference. The
undersigned hereby certifies that this Note is one of the Notes
guarantied by the undersigned pursuant to Section 10 of the Note
Purchase Agreement.
HUDSON FARMS, INC.
By____________________________
____
Name:
Title:
<PAGE>
SCHEDULE 1
SCHEDULE OF PRINCIPAL AND INTEREST PAYMENTS
Date of Payment Interest Principal Total
This Schedule 1 sets forth the schedule of principal and interest
payments due on the Series of Notes of which this Note is a part.
The holder of this Note is entitled to a ratable portion of the
payments set forth in this Schedule 1, as determined in accordance
with the terms and provisions of Section 4.4(a) of the Note
Purchase Agreement.
<PAGE>
EXHIBIT B
[FORM OF PURCHASE REQUEST]
HUDSON FOODS, INC.
PURCHASE REQUEST
Reference is made to the Note Purchase Agreement (the "Note
Purchase Agreement"), dated as of May 18, 1994, among Hudson Foods,
Inc. (the "Company"), a Delaware corporation, Hudson Farms, Inc.,
an Arkansas corporation, and the purchasers named on Annex 1
thereto. Capitalized terms used herein that are not defined herein
have the respective meanings ascribed to such terms in the Note
Purchase Agreement.
Pursuant to Section 1.2(a) of the Note Purchase Agreement, the
Company hereby makes the following Purchase Request:
1. Aggregate principal amount of
the Series of Notes covered hereby
(the "Notes"):
[$____________________________]
2. Series of Notes: [__]
3. Available Facility Amount
as of the date hereof (without
giving effect to the issuance of the Notes):
[$____________________________]
4. The Proposed Schedule for the payments of interest
and principal, as determined in accordance with
Section 1.2(b)(iii) of the Note Purchase Agreement,
is set forth on Schedule 1 hereto.
5. Use of proceeds of the Notes:
6. Proposed Closing Date of the
purchase and sale of the Notes: [_________ __,
____]
7. The purchase price of the Notes is to be transferred to:
Name and Address of Bank Account Number Name and Telephone
Number of Bank Officer
8. Additional information required to update the information
disclosed on Annex 2 to the Note Purchase Agreement is
set forth on Schedule 2 hereto.
9. The Company hereby certifies that
(a) the representations and warranties contained
in Section 2 of the Note Purchase Agreement (as modified
by the information disclosed on Schedule 2 hereto) are
true and correct on and as of the date of this Purchase
Request, and
(b) there exists on the date of this Purchase
Request no Event of Default or Default.
IN WITNESS WHEREOF, I have executed this Purchase Request in
the name and on behalf of the Company on [______ __, ____].
HUDSON FOODS, INC.
By____________________________
____
Name:
Title:
<PAGE>
SCHEDULE 1
PROPOSED SCHEDULE OF PRINCIPAL AND INTEREST PAYMENTS
Date of Payment Interest Principal Total<PAGE>
SCHEDULE 2
ADDITIONAL INFORMATION TO BE DISCLOSED
SOLELY TO UPDATE ANNEX 2 TO THE NOTE PURCHASE AGREEMENT
[To be added at the time of each Purchase Request]
<PAGE>
EXHIBIT C
[FORM OF CONFIRMATION OF ACCEPTANCE]
HUDSON FOODS, INC.
CONFIRMATION OF ACCEPTANCE
Reference is made to the Note Purchase Agreement (the "Note
Purchase Agreement"), dated as of May 18, 1994, among Hudson Foods,
Inc. (the "Company"), a Delaware corporation, Hudson Farms, Inc.,
an Arkansas corporation, and the purchasers named on Annex 1
thereto. Capitalized terms used herein that are not defined herein
have the respective meanings ascribed to such terms in the Note
Purchase Agreement.
Each of the undersigned Purchasers of Accepted Notes hereby
confirms the representations as to such Accepted Notes set forth
in Section 1.5 of the Note Purchase Agreement.
Pursuant to Section 1.2(c) of the Note Purchase Agreement, an
Acceptance Notice with respect to the following Series of Accepted
Notes is hereby confirmed:
1. Series of Notes: [___]
2. Aggregate principal amount of Notes:
$[___________________]
(a) (i) Name of Purchaser: John Hancock Mutual Life
Insurance Company (General
Account)
(ii) Principal amount:
(iii) Interest rate:
(b) (i) Name of Purchaser: John Hancock Mutual Life
Insurance Company (GBSA)
(ii) Principal amount:
(iii) Interest rate:
(c) (i) Name of Purchaser: John Hancock Life Insurance
Company of America
(ii) Principal amount:
(iii) Interest rate:
3. Installments of principal and interest on the Series of
Accepted Notes described herein shall be made by the
Company on the dates and in the amounts set forth on
Schedule 1 hereto.
4. Closing Date: [___________ __,
____]
Two or more duplicate originals hereof may be signed by the
parties, each of which shall be an original but all of which
together shall constitute one and the same instrument. This
Confirmation of Acceptance may be executed in one or more
counterparts and shall be effective when at least one counterpart
shall have been executed by each party hereto, and each set of
counterparts that, collectively, show execution by each party
hereto shall constitute one duplicate original.
IN WITNESS WHEREOF, the undersigned have executed this
Confirmation of Acceptance on [______ __, ____].
HUDSON FOODS, INC.
By________________________________
Name:
Title:
JOHN HANCOCK MUTUAL LIFE INSURANCE
COMPANY
By________________________________
Name:
Title:
JOHN HANCOCK LIFE INSURANCE COMPANY
OF AMERICA
By________________________________
Name:
Title:
Date: [________ __, ____]
<PAGE>
SCHEDULE 1
SCHEDULE OF PRINCIPAL AND INTEREST PAYMENTS
Date of Payment Interest Principal Total
<PAGE>
EXHIBIT D1
[FORM OF OPINION OF COUNSEL TO THE COMPANY AND THE GUARANTOR]
[Letterhead of Wright, Lindsey & Jennings]
[Closing Date]
To the Persons Listed on
Annex 1 hereto
Re: Hudson Foods, Inc. (the "Company")
Hudson Farms, Inc. (the "Guarantor")
Ladies and Gentlemen:
Reference is made to the Note Purchase Agreement (the "Note
Purchase Agreement"), dated as of May 18, 1994, among the Company,
the Guarantor and the purchasers listed on Annex 1 attached thereto
(the "Purchasers"), which provides, among other things, for (i) the
issuance and sale by the Company, from time to time, of its Fixed
Rate Senior Notes (the "Notes"), in the aggregate principal amount
of Fifty Million Dollars ($50,000,000), and (ii) the guaranty by
the Guarantor of the Company's obligations pursuant to the Note
Purchase Agreement and the Notes. The capitalized terms used
herein and not defined herein have the meanings specified in the
Note Purchase Agreement.
We have acted as counsel to the Company and the Guarantor in
connection with the transactions contemplated by the Note Purchase
Agreement. This opinion is delivered to you pursuant to Section
3.1 of the Note Purchase Agreement. In acting as such counsel, we
have examined:
(a) the Note Purchase Agreement;
(b) the Company's Series [__] Fixed Rate Senior Notes
being issued to the Purchasers on the date hereof, dated the
date hereof, in the form, principal amount, and with the
registration numbers set forth on Annex 1 to the Note Purchase
Agreement, bearing interest at the rate set forth therein and
scheduled to mature on the date set forth therein (the
"Accepted Notes");
(c) the documents executed and delivered by the Company
and the Guarantor in connection with the transactions
contemplated by the Note Purchase Agreement;
(d) the bylaws and records of proceedings of the
directors and stockholders of each of the Company and the
Guarantor, respectively, and a certified copy of the
certificate or articles of incorporation of each of the
Company and the Guarantor, each as in effect on the date
hereof;
(e) long-form good standing certificates from the state
of incorporation of each of the Company and the Guarantor, and
foreign good standing certificates for each of such
corporations from each of the states set forth on Annex 2
hereto;
(f) a letter to Hebb & Gitlin and this firm from
Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A.
("Rabobank Nederland"), New York Branch, describing the manner
of the offering of the Notes (the "Offeree Letter");
(g) the opinion of Hebb & Gitlin, counsel to the
Purchasers, dated the date hereof; and
(h) originals, or copies certified or otherwise
identified to our satisfaction, of such other documents,
records, instruments and certificates of public officials as
we have deemed necessary or appropriate to enable us to render
this opinion.
In rendering our opinion, we have relied, to the extent we
deem necessary and proper, on:
(i) warranties and representations as to certain factual
matters contained in the Note Purchase Agreement;
(ii) the Offeree Letter; and
(iii) said opinion of Hebb & Gitlin with respect to
all matters governed by the laws of the Commonwealth of
Massachusetts.
We have no actual knowledge of any material inaccuracies in
any of the facts contained in the documents listed in item (i) or
item (ii).
We note that the Note Purchase Agreement and the Accepted
Notes are governed by the law of the Commonwealth of Massachusetts
and have relied on the opinion of Hebb & Gitlin with respect to the
enforceability of such documents under Massachusetts law. If the
Note Purchase Agreement and the Accepted Notes were governed by the
law of the State of Arkansas, our opinion would not vary from the
opinions set forth below except that we would be required to
qualify our opinion with respect to the application of Arkansas
usury law to the transactions contemplated by the Note Purchase
Agreement.
For purposes of the opinions stated in paragraph 13, we have
assumed the following facts:
(a) The Purchasers are organized under the laws of the
Commonwealth of Massachusetts or the State of Delaware, and
each maintains its principal place of business in the
Commonwealth of Massachusetts.
(b) The terms of the Note Purchase Agreement and the
Notes were primarily negotiated outside of Arkansas or by
telecommunication between representatives of the Company and
the Guarantor located in Arkansas and representatives of the
Purchasers located outside of Arkansas.
(c) The Note Purchase Agreement was primarily prepared
in Connecticut by special counsel to the Purchasers.
(d) The Note Purchase Agreement has been executed and
delivered by the Company, the Guarantor and each of the
Purchasers in the Commonwealth of Massachusetts. The Accepted
Notes have been delivered to the Purchasers at their offices
located in the Commonwealth of Massachusetts.
(e) The Purchasers will make monies available to the
Company at each Purchaser's respective bank located in Boston,
Massachusetts.
(f) The Company will repay amounts loaned under the
Accepted Notes at the Purchasers' Massachusetts bank as set
forth in the Note Purchase Agreement.
Based on the foregoing, we are of the following opinions:
1. Each of the Company and the Guarantor is a corporation
duly incorporated, validly existing and in good standing under the
laws of its state of incorporation and has all requisite corporate
power and authority to carry on its business and own its Property.
2. Each of the Company and the Guarantor has duly qualified
and is in good standing as a foreign corporation in each
jurisdiction where the character of its Properties or the nature
of its activities makes such qualification necessary, except where
the failure to so qualify and be in good standing would not have
a Material Adverse Effect.
3. To our knowledge after due inquiry of officers of the
Company and the Guarantor concerning the nature of the business of
the Company and the Guarantor and such other inquiry as we have
deemed relevant, all consents, approvals and authorizations of, and
all designations, declarations, filings, registrations,
qualifications, or recordations with, Governmental Authorities
required on the part of each of the Company and the Guarantor have
been obtained in connection with the ownership of its Properties
and the conduct of its businesses, except where the failure to
obtain any such consent, approval or authorization with respect to
such ownership and conduct would not have a Material Adverse
Effect.
4. To our knowledge after due inquiry of officers of the
Company and the Guarantor, there is no default or existing
condition which with the passage of time or notice, or both, would
result in a default by the Company or the Guarantor under any
contract, lease or commitment known to us to which any one or more
of such Persons is a party or by which their respective Properties
may be bound, except where such defaults would not have a Material
Adverse Effect.
5. To our knowledge after due inquiry of officers of the
Company and the Guarantor, there is no judgment, order, action,
suit, proceeding, inquiry, order or investigation, at law or in
equity, before any court or Governmental Authority, arbitration
board or tribunal, pending or threatened against any one or more
of such Persons, except for any such judgment, order, action, suit,
proceeding, inquiry, order or investigation disclosed in Part I,
Item 3 of the Most Recent 10-K or that would not have a Material
Adverse Effect.
6. (a) Each of the Company and the Guarantor has the
requisite corporate power and authority to execute and
deliver the Note Purchase Agreement and to perform its
respective obligations thereunder.
(b) The Company has the requisite corporate power
and authority to issue and sell the Accepted Notes and
to perform its obligations thereunder.
7. (a) The Note Purchase Agreement and the Accepted
Notes have been duly authorized by all necessary
corporate action on the part of the Company (no action
on the part of the stockholders of the Company being
required in respect thereof), have been duly executed and
delivered by authorized officers of the Company, and
constitute legal, valid and binding obligations of the
Company, enforceable against the Company in accordance
with their respective terms.
(b) The Note Purchase Agreement has been duly
authorized by all necessary corporate action on the part
of the Guarantor (no action on the part of the
stockholders of the Guarantor being required in respect
thereof), has been duly executed and delivered by
authorized officers of the Guarantor, and constitutes a
legal, valid and binding obligation of the Guarantor,
enforceable against the Guarantor in accordance with its
terms.
8. (a) The execution and delivery of the Note Purchase
Agreement and the issuance and sale of the Accepted Notes
by the Company, and the performance by the Company of its
obligations thereunder, do not and will not conflict
with, constitute a violation of, result in a breach of
any provision of, constitute a default under, or result
in the creation or imposition of any Lien or encumbrance
upon any of its Property pursuant to the certificate of
incorporation or bylaws of the Company, any applicable
statute, rule or regulation to which the Company is
subject, or, to our knowledge after due inquiry of
officers of the Company, any agreement or instrument to
which the Company is a party or by which its respective
Properties may be bound.
(b) The execution and delivery of the Note Purchase
Agreement by the Guarantor, and the performance by the
Guarantor of its obligations thereunder, do not and will
not conflict with, constitute a violation of, result in
a breach of any provision of, constitute a default under,
or result in the creation or imposition of any Lien or
encumbrance upon any of its Property pursuant to the
articles of incorporation or bylaws of the Guarantor, any
applicable statute, rule or regulation to which the
Guarantor is subject, or, to our knowledge after due
inquiry of officers of the Guarantor, any agreement or
instrument to which the Guarantor is a party or by which
its Properties may be bound.
9. All consents, approvals and authorizations of, and all
designations, declarations, filings, registrations, qualifications
and recordations with, Governmental Authorities required on the
part of the Company and the Guarantor have been obtained in
connection with the execution and delivery of the Note Purchase
Agreement and the offer, issue, sale and delivery of the Accepted
Notes and the use of the proceeds thereof.
10. Under existing law, the Accepted Notes are not subject
to the registration requirements of the Securities Act of 1933, as
amended, and the Company is not required to qualify an indenture
with respect thereto under the Trust Indenture Act of 1939, as
amended.
11. Neither the issuance of the Notes nor the intended use
of the proceeds of the Notes (as set forth in Section 2.18 of the
Note Purchase Agreement) will violate Regulations G, T or X of the
Federal Reserve Board.
12. To our knowledge based on inquiry of officers of the
Company as to the nature of the business of the Company and the
Guarantor and such other inquiry as we have deemed relevant,
neither the Company nor the Guarantor
(a) is an "investment company" within the meaning of the
Investment Company Act of 1940, as amended,
(b) is a "holding company" or an "affiliate" of a
"holding company," or a "subsidiary company" of a "holding
company," or a "public utility" within the meaning of the
Public Utility Holding Company Act of 1935, as amended, or
Commerce Act or the Federal Power Act.
13. The choice of the laws of the Commonwealth of
Massachusetts to govern the Note Purchase Agreement and the Notes
will be recognized and upheld by the federal and state courts of
the State of Arkansas and the obligations of the Company and the
Guarantor under the Note Purchase Agreement and the Accepted Notes
will be recognized and enforced in accordance with Massachusetts
law by the federal and state courts of the State of Arkansas.
All opinions herein contained with respect to the
enforceability of documents and instruments are qualified to the
extent that:
(a) the availability of equitable remedies, including
without limitation, specific enforcement and injunctive
relief, is subject to the discretion of the court before which
any proceedings therefor may be brought; and
(b) the enforceability of certain terms provided in the
Note Purchase Agreement may be limited by
(i) applicable bankruptcy, reorganization,
arrangement, insolvency, fraudulent conveyance,
moratorium or similar laws affecting the enforcement of
creditors' rights generally as at the time in effect,
(ii) general principles of equity and the discretion
of a court in granting equitable remedies (whether
enforceability is considered in a proceeding at law or
in equity), and
(iii) common law or statutory requirements with
respect to commercial reasonableness.
We are qualified to practice law in the State of Arkansas, and
we do not purport to be experts in, or to express any opinions
herein concerning, any laws other than the laws of the State of
Arkansas, the general corporation law of the State of Delaware and
the federal laws of the United States, except in reliance on the
opinion of Hebb & Gitlin with respect to matters governed by the
laws of the Commonwealth of Massachusetts.
This opinion is as of the date hereof, and we undertake no,
and hereby disclaim any, obligation to advise you of any change in
any matter set forth herein. We acknowledge that this opinion is
being issued at the request of the Company and the Guarantor
pursuant to Section 3.1 of the Note Purchase Agreement and we agree
that the parties listed on Annex 1 hereto may rely and are relying
hereon in connection with the consummation of the transactions
contemplated by the Note Purchase Agreement. Hebb & Gitlin may
rely on this opinion for the sole purpose of rendering its opinion
pursuant to Section 3.1 of the Note Purchase Agreement. Subsequent
holders of the Notes may rely on this opinion as if it were
addressed to them.
Very truly yours,<PAGE>
ANNEX 1
Addressees
John Hancock Mutual Life Insurance Company
John Hancock Place
200 Clarendon Street
Boston, Massachusetts 02117
John Hancock Life Insurance Company of America
John Hancock Place
200 Clarendon Street
Boston, Massachusetts 02117
Hebb & Gitlin
One State Street
Hartford, CT 06103
<PAGE>
ANNEX 2
Foreign Good Standing Certificates
Corporation<PAGE>
State
<PAGE>
EXHIBIT D2
[FORM OF OPINION OF SPECIAL COUNSEL TO THE PURCHASERS]
[Letterhead of Hebb & Gitlin]
[Closing Date]
To the Persons Listed on
Annex 1 hereto
Re: Hudson Foods, Inc. (the "Company")
Hudson Farms, Inc. (the "Guarantor")
Ladies and Gentlemen:
Reference is made to the Note Purchase Agreement (the "Note
Purchase Agreement"), dated as of May 18, 1994, among the Company,
the Guarantor and the purchasers listed on Annex 1 attached thereto
(the "Purchasers"), which provides, among other things, for (i) the
issuance and sale by the Company, from time to time, of its Fixed
Rate Senior Notes (the "Notes"), in the aggregate principal amount
of up to Fifty Million Dollars ($50,000,000), and (ii) the guaranty
by the Guarantor of the Company's obligations pursuant to the Note
Purchase Agreement and the Notes. The capitalized terms used
herein and not defined herein have the meanings specified in the
Note Purchase Agreement.
We have acted as special counsel to the Purchasers in
connection with the transactions contemplated by the Note Purchase
Agreement. This opinion is delivered to you pursuant to Section
3.1 of the Note Purchase Agreement. In acting as such counsel, we
have examined:
(a) the Note Purchase Agreement;
(b) the Company's Series [__] Fixed Rate Senior Notes
being issued to the Purchasers on the date hereof, dated the
date hereof, in the form, principal amount, and with the
registration numbers set forth on Annex 1 to the Note Purchase
Agreement, bearing interest at the rate set forth therein and
scheduled to mature on the date set forth therein (the
"Accepted Notes");
(c) a certificate of an officer of the Company,
substantially in the form attached to the Note Purchase
Agreement as Exhibit E1;
(d) a certificate of an officer of the Guarantor,
substantially in the form attached to the Note Purchase
Agreement as Exhibit E2;
(e) a certificate of the Secretary of the Company,
substantially in the form attached to the Note Purchase
Agreement as Exhibit F1;
(f) certificates of the [Assistant] Secretary of the
Guarantor, substantially in the form attached to the Note
Purchase Agreement as Exhibit F2;
(g) a letter to Hebb & Gitlin from Cooperatieve Centrale
Raiffeisen-Boerenleenbank B.A. ("Rabobank Nederland"), New
York Branch, dated the date hereof, making certain
representations with respect to the manner in which the Notes
were offered (the "Offeree Letter");
(h) the opinion of Wright, Lindsey & Jennings, counsel
to the Company and the Guarantor, dated the date hereof; and
(i) originals, or copies certified or otherwise
identified to our satisfaction, of such other documents,
records, instruments and certificates of public officials as
we have deemed necessary or appropriate to enable us to render
this opinion.
In rendering our opinion, we have relied, to the extent we
deem necessary and proper, on:
(i) warranties and representations as to certain factual
matters contained in the Note Purchase Agreement and the
certificates and instruments delivered on the Closing Date in
connection with the issuance and sale of the Accepted Notes;
(ii) the Offeree Letter; and
(iii) said opinion of Wright, Lindsey & Jennings with
respect to all questions governed by the laws of the State of
Arkansas and the corporation law of the State of Delaware and
with respect to all questions concerning the due
incorporation, valid existence and good standing, power and
authority of, and the authorization, execution and delivery
of instruments by, the Company and the Guarantor (except that
we have made an independent examination of (a) certified
copies of the certificate of incorporation of the Company and
the articles of incorporation of the Guarantor, and (b) the
certificates specified in clause (c), clause (d), clause (e)
and clause (f) above).
We have reviewed the opinion of Wright, Lindsey & Jennings
being delivered to you on the date hereof. Based on such
investigation as we have deemed appropriate, said opinion is
satisfactory in form and scope to us and in our opinion the
Purchasers and we are justified in relying thereon.
Our opinion in Section 5 below is based solely on a review of
generally applicable laws of the United States of America and the
Commonwealth of Massachusetts, and not on any search with respect
to, or review of, any orders, decrees, judgments or other
determinations specifically applicable to the Company or the
Guarantor.
Based on the foregoing, we are of the following opinions:
1. Each of the Company and the Guarantor is a corporation
duly incorporated, validly existing and in good standing under the
laws of its state of incorporation.
2. (a) Each of the Company and the Guarantor has the
requisite corporate power and authority to execute and
deliver the Note Purchase Agreement and to perform its
respective obligations thereunder.
(b) The Company has the requisite corporate power
and authority to issue and sell the Notes and to perform
its obligations thereunder.
3. (a) Each of the Note Purchase Agreement and the
Accepted Notes have been duly authorized by all necessary
corporate action on the part of the Company (no action
on the part of the stockholders of the Company being
required in respect thereof), have been duly executed and
delivered by authorized officers of the Company, and
constitute a legal, valid and binding obligation of the
Company, enforceable against the Company in accordance
with their respective terms.
(b) The Note Purchase Agreement has been duly
authorized by all necessary corporate action on the part
of the Guarantor (no action on the part of the
stockholders of the Guarantor being required in respect
thereof), has been duly executed and delivered by
authorized officers of the Guarantor, and constitutes a
legal, valid and binding obligation of the Guarantor,
enforceable against the Guarantor in accordance with its
terms.
4. (a) The execution and delivery of the Note Purchase
Agreement and the issue and sale of the Notes by the
Company, and the performance by the Company of its
respective obligations thereunder, do not and will not
conflict with, constitute a violation of, result in a
breach of any provision of, constitute a default under,
or result in the creation or imposition of any Lien or
encumbrance upon any of its Property pursuant to its
certificate of incorporation or bylaws.
(b) The execution and delivery of the Note Purchase
Agreement by the Guarantor and the performance by the
Guarantor of its obligations thereunder, do not and will
not conflict with, constitute a violation of, result in
a breach of any provision of, constitute a default under,
or result in the creation or imposition of any Lien or
encumbrance upon any of its respective Properties
pursuant to its articles of incorporation or bylaws.
5. No consents, approvals or authorizations of governmental
authorities are required in connection with the execution and
delivery of the Note Purchase Agreement by the Company and the
Guarantor, and the offer, issue, sale and delivery of the Accepted
Notes by the Company.
6. Under existing law, the Accepted Notes are not subject
to the registration requirements under the Securities Act of 1933,
as amended, and the Company is not required to qualify an indenture
with respect thereto under the Trust Indenture Act of 1939, as
amended.
All opinions herein contained with respect to the
enforceability of documents and instruments are qualified to the
extent that:
(a) the availability of equitable remedies, including
without limitation, specific enforcement and injunctive
relief, is subject to the discretion of the court before which
any proceedings therefor may be brought; and
(b) the enforceability of certain terms provided in the
Note Purchase Agreement may be limited by
(i) applicable bankruptcy, reorganization,
arrangement, insolvency, moratorium or similar laws
affecting the enforcement of creditors' rights generally
as at the time in effect,
(ii) general principles of equity and the discretion
of a court in granting equitable remedies (whether
enforceability is considered in a proceeding at law or
in equity), and
(iii) common law or statutory requirements with
respect to commercial reasonableness.
In rendering the foregoing opinions we have assumed that the
Guarantor has received fair consideration and reasonably equivalent
value in exchange for the obligations incurred, and the interests
in Property conveyed, by it.
Except in reliance on the opinion of Wright, Lindsey &
Jennings delivered to the Purchasers on the date hereof (and
subject to all of the qualifications and assumptions contained
therein), we express no opinion as to the law of any jurisdiction
other than the law of the Commonwealth of Massachusetts and United
States federal law. Wright, Lindsey & Jennings may rely on this
opinion for the sole purpose of rendering their opinion to be
rendered pursuant to Section 3.1 of the Note Purchase Agreement.
Subsequent holders of the Notes may rely on this opinion as
if it were addressed to them.
Very truly yours,<PAGE>
ANNEX 1
Addressees
John Hancock Mutual Life Insurance Company
John Hancock Place
200 Clarendon Street
Boston, Massachusetts 02117
John Hancock Life Insurance Company of America
John Hancock Place
200 Clarendon Street
Boston, Massachusetts 02117
<PAGE>
EXHIBIT E1
[FORM OF OFFICER'S CERTIFICATE OF THE COMPANY]
HUDSON FOODS, INC.
CERTIFICATE OF OFFICER
I, ______, hereby certify that I am the ______ of HUDSON
FOODS, INC. (the "Company"), a Delaware corporation, and that, as
such, I have access to its corporate records and am familiar with
the matters herein certified, and I am authorized to execute and
deliver this Certificate in the name and on behalf of the Company,
and that:
1. This certificate is being delivered pursuant to Section
3.3 of the Note Purchase Agreement (the "Note Purchase Agreement"),
dated as of May 18, 1994, among the Company, Hudson Farms, Inc.,
an Arkansas corporation, and the purchasers named on Annex 1
thereto (the "Purchasers"). The terms used in this Certificate and
not defined herein have the respective meanings ascribed thereto
in the Note Purchase Agreement.
2. The warranties and representations contained in Section
2 of the Note Purchase Agreement (as modified by the information
disclosed on Schedule 2 to the Purchase Request in respect of the
Accepted Notes being issued on the date hereof) are true and
correct in all material respects on the date hereof with the same
effect as though made on and as of the date hereof.
3. The Company has performed and complied with all
agreements and conditions contained in the Note Purchase Agreement
that are required to be performed or complied with by the Company
before or at the date hereof.
4. ______, from ______ __, [____] [date of resolutions] to
the date hereof, inclusive, has been and is the duly elected,
qualified and acting [Assistant] Secretary of the Company, and the
signature appearing on the Certificate of [Assistant] Secretary
dated the date hereof and delivered to the Purchasers
contemporaneously herewith is his or her genuine signature.
IN WITNESS WHEREOF, I have executed this Certificate in the
name and on behalf of the Company on [______ __, ____] [Closing
Date].
HUDSON FOODS, INC.
By:
Name:
<PAGE>
EXHIBIT E2
[FORM OF OFFICER'S CERTIFICATE OF THE GUARANTOR]
HUDSON FARMS, INC.
CERTIFICATE OF OFFICER
I, ______, hereby certify that I am the ________ of HUDSON
FARMS, INC. (the "Guarantor"), an Arkansas corporation, and that,
as such, I have access to its corporate records and am familiar
with the matters herein certified, and I am authorized to execute
and deliver this Certificate in the name and on behalf of the
Guarantor, and that:
1. This certificate is being delivered pursuant to Section
3.3 of the Note Purchase Agreement (the "Note Purchase Agreement"),
dated as of May 18, 1994, among Hudson Foods, Inc., the Guarantor
and the purchasers named on Annex 1 thereto (the "Purchasers").
The terms used in this Certificate and not defined herein have the
respective meanings ascribed thereto in the Note Purchase
Agreement.
2. The warranties and representations contained in Section
2 of the Note Purchase Agreement (as modified by the information
disclosed on Schedule 2 to the Purchase Request in respect of the
Accepted Notes being issued on the date hereof) are true and
correct in all material respects on the date hereof with the same
effect as though made on and as of the date hereof.
3. The Guarantor has performed and complied with all
agreements and conditions contained in the Note Purchase Agreement
that are required to be performed or complied with by the Guarantor
before or at the date hereof.
4. ______, from ______ __, [____] [date of resolutions] to
the date hereof, inclusive, has been and is the duly elected,
qualified and acting [Assistant] Secretary of the Guarantor, and
the signature appearing on the Certificate of [Assistant] Secretary
dated the date hereof and delivered to the Purchasers
contemporaneously herewith is his or her genuine signature.
IN WITNESS WHEREOF, I have executed this Certificate in the
name and on behalf of the Guarantor on [______ __, ____] [Closing
Date].
HUDSON FARMS, INC.
By:
Name:
<PAGE>
EXHIBIT F1
[FORM OF SECRETARY'S CERTIFICATE OF THE COMPANY]
HUDSON FOODS, INC.
CERTIFICATE OF [ASSISTANT] SECRETARY
I, ______, hereby certify that I am the duly elected,
qualified and acting [Assistant] Secretary of HUDSON FOODS, INC.
(the "Company"), a Delaware corporation, and that, as such, I have
access to its corporate records and am familiar with the matters
herein certified, and I am authorized to execute and deliver this
Certificate in the name and on behalf of the Company, and that:
1. This certificate is being delivered pursuant to Section
3.3 of the Note Purchase Agreement (the "Note Purchase Agreement"),
dated as of May 18, 1994, among the Company, Hudson Farms, Inc.,
an Arkansas corporation, and the purchasers named on Annex 1
thereto (the "Purchasers"). The terms used in this Certificate and
not defined herein have the respective meanings specified in the
Note Purchase Agreement.
2. Attached hereto as Attachment A is a true and correct
copy of resolutions, and the preamble thereto, adopted by the Board
of Directors of the Company on ______ __, ____, and such
resolutions and preamble set forth in Attachment A hereto were duly
adopted by said Board of Directors and are in full force and effect
on and as of the date hereof, not having been amended, altered or
repealed, and such resolutions are filed with the records of the
Board of Directors.
3. The documents listed below were executed and delivered
by the Company pursuant to and in accordance with the resolutions
set forth in Attachment A hereto and said documents as executed are
substantially in the form submitted to and approved by the Board
of Directors of the Company as aforementioned:
(a) the Note Purchase Agreement providing for the sale
by the Company and the purchase by the Purchasers of the
Company's Fixed Rate Senior Notes (the "Notes") from time to
time; and
(b) the Notes being purchased by the Purchasers on the
date hereof in the aggregate principal amount of [__________]
Dollars ($[_______]) designated as the Series [__] Notes (the
"Accepted Notes").
4. Attached hereto as Attachment B is a true, correct and
complete copy of the bylaws of the Company as in full force and
effect on and as of the date hereof, which bylaws were last amended
by the Board of Directors of the Company on, and have been in full
effect in said form at all times from ______ __, ____ [date prior
to adoption of resolutions] to the date hereof, inclusive, without
modification or amendment in any respect.
5. Each of the following named persons is and has been a
duly elected, qualified and acting officer of the Company holding
the office or offices set forth below opposite his or her name from
______ __, ____ [date of adoption of resolutions] to the date
hereof, inclusive:
[List Only Officers Executing Documents]
Name<PAGE>
Office Signature
<PAGE>
[Chairman of the
Board]<PAGE>
/s/
<PAGE>
[President] /s/
<PAGE>
[Vice President,
Finance]<PAGE>
/s/
<PAGE>
[Secretary] /s/
<PAGE>
[Assistant
Secretary]<PAGE>
/s/
<PAGE>
[Treasurer] /s/
<PAGE>
[Comptroller] /s/
6. The signature appearing opposite the name of each such
person set forth above is his or her genuine signature.
7. Attached hereto as Attachment C is a long-form good
standing certificate in respect of the Company from the State of
Delaware which certificate
(a) lists all corporate documents filed with the
Secretary of State of Delaware on or prior to the date hereof
in respect of the Company,
(b) has attached copies of such documents,
(c) bears the certification of the Secretary of State
of Delaware, and
(d) is true, correct and complete.
8. There have been no amendments or supplements to or
restatements of the certificate of incorporation of the Company
since ______ __, 19__ [date preceding date of copy certified by
Sec. of State].
IN WITNESS WHEREOF, I have hereunto set my hand on ______ __,
19__. [Closing Date]
HUDSON FOODS, INC.
Secretary <PAGE>
Attachment A
BOARD OF DIRECTORS
HUDSON FOODS, INC.
RESOLUTIONS ADOPTED
1. RESOLUTIONS TO BE ADOPTED PRIOR TO FACILITY CLOSING DATE:
WHEREAS, there has been submitted to this Board a form of the
draft of the Note Purchase Agreement (together with all exhibits
and schedules thereto, referred to herein as the "Note Purchase
Agreement"), to be entered into by the Company and each of the
purchasers listed on Annex 1 thereto (together with any affiliate
of any thereof, the "Purchasers") pursuant to which the Purchasers
will purchase from the Company, from time to time, the Company's
Fixed Rate Senior Notes, in the aggregate principal amount of up
to Fifty Million Dollars ($50,000,000) (the "Notes").
WHEREAS, this Board has reviewed in detail and discussed the
terms and provisions of the Note Purchase Agreement, including the
forms of the Notes specified therein; and
WHEREAS, on the basis of its review of the Note Purchase
Agreement and the Notes and of the principal terms and provisions
of the transactions provided for therein, this Board deems it
advisable and in the best interest of the Company that the
transactions provided in the Note Purchase Agreement be consummated
substantially in accordance with the provisions thereof; and
WHEREAS, terms used in these preambles and resolutions and not
herein defined shall have the respective meanings ascribed to them
in the Note Purchase Agreement;
NOW THEREFORE, BE IT RESOLVED, that the form of, and each of
the terms and provisions contained in, the Note Purchase Agreement,
are hereby authorized, ratified and approved in each and every
respect; and each and every transaction effected or to be effected
pursuant to and substantially in accordance with the terms of the
Note Purchase Agreement, including, but not limited to, each
specific transaction that is described, authorized, ratified and
approved in these resolutions, is hereby authorized, ratified and
approved in each and every respect;
RESOLVED, that the Company enter into the Note Purchase
Agreement with each of the Purchasers or any affiliate thereof and
that each of the Chairman of the Board, the President, any Vice
President, the Treasurer and each other officer of the Company
(each an "Authorized Officer") is hereby severally authorized to
execute and deliver, in the name and on behalf of the Company, the
Note Purchase Agreement in the form thereof presented to this Board
and heretofore approved, with such changes therein as shall be
approved by the officer executing and delivering the same, such
approval to be evidenced conclusively by such execution and
delivery; and
RESOLVED, that the Company borrow from the Purchasers from
time to time an aggregate amount of funds as provided in the Note
Purchase Agreement, such indebtedness to be evidenced by the Notes,
in the amounts and upon the terms and conditions provided for in
the Note Purchase Agreement; and that each of the Authorized
Officers is hereby severally authorized to execute and deliver the
Notes from time to time, in the name and on behalf of the Company,
substantially in the respective forms thereof presented to this
Board and heretofore approved, with such changes therein as shall
be approved by the officer or officers executing and delivering the
same, such approval to be evidenced conclusively by such execution
and delivery; and
RESOLVED, that this Board hereby authorizes each of the
Authorized Officers, severally, to execute and deliver for and on
behalf of the Company the certificates required by the Note
Purchase Agreement; and
RESOLVED, that the Authorized Officers and any person or
persons designated and authorized so to act by any Authorized
Officer are hereby each severally authorized to do and perform or
cause to be done and performed, in the name and on behalf of the
Company, all other acts, to pay or cause to be paid, on behalf of
the Company, all related costs and expenses and to execute and
deliver or cause to be executed and delivered such other notices,
requests, demands, directions, consents, approvals, orders,
applications, agreements, instruments, certificates, undertakings,
supplements, amendments, further assurances or other communications
of any kind, under the corporate seal of the Company or otherwise
and in the name of and on behalf of the Company or otherwise, as
he, she or they may deem necessary, advisable or appropriate to
effect the intent of the foregoing Resolutions or to comply with
the requirements of the instruments approved and authorized by the
foregoing Resolutions, including but not limited to the Note
Purchase Agreement and the Notes; and
RESOLVED, that any acts of any Authorized Officer of the
Company and of any person or persons designated and authorized to
act by any Authorized Officer of the Company, which acts would have
been authorized by the foregoing Resolutions except that such acts
were taken prior to the adoption of such Resolutions, are hereby
severally ratified, confirmed, approved and adopted as the acts of
the Company; and
RESOLVED, that each of the Secretary and each Assistant
Secretary of the Company is hereby severally authorized and
empowered to certify to the passage of the foregoing Resolutions
under the seal of this Company or otherwise.
2. RESOLUTIONS TO BE ADOPTED PRIOR TO EACH CLOSING DATE:
WHEREAS, the Company has entered into the Note Purchase
Agreement, dated as of May 18, 1994, pursuant to which the Company
can issue and sell to the purchasers named therein up to Fifty
Million Dollars ($50,000,000) in aggregate principal amount of the
Notes as set forth therein;
WHEREAS, this Board has reviewed the proposed issuance by the
Company of certain Notes to be issued by the Company in the
aggregate principal amount of [_____________________] Dollars
($[_________]) designated as the Series [__] Notes, bearing
interest at a rate equal to [____________] percent ([___]%) per
annum and scheduled to mature on [__________ __, ____] (the
"Accepted Notes") pursuant to the terms and provisions of the Note
Purchase Agreement;
WHEREAS, this Board has reviewed in detail and discussed the
terms and provisions of the Note Purchase Agreement and Accepted
Notes; and
WHEREAS, on the basis of its review of the Note Purchase
Agreement and the Notes and of the principal terms and provisions
of the Accepted Notes, this Board deems it advisable and in the
best interest of the Company that the Company issue and sell the
Accepted Notes in accordance with the provisions of the Note
Purchase Agreement; and
WHEREAS, terms used in these preambles and resolutions and not
herein defined shall have the respective meanings ascribed to them
in the Note Purchase Agreement;
NOW THEREFORE, BE IT RESOLVED, that the Company borrow from
the Purchasers an aggregate amount of funds, such indebtedness to
be evidenced by the Accepted Notes, in the amounts and upon the
terms and conditions provided for in the Accepted Notes and in the
Note Purchase Agreement; and that each of the Chairman of the
Board, the President, any Vice President, the Treasurer and each
other officer of the Company (each an "Authorized Officer") is
hereby severally authorized to execute and deliver the Accepted
Notes, in the name and on behalf of the Company, substantially in
the respective forms thereof presented to this Board and heretofore
approved, with such changes therein as shall be approved by the
officer or officers executing and delivering the same, such
approval to be evidenced conclusively by such execution and
delivery; and
RESOLVED, that this Board hereby authorizes each of the
Authorized Officers, severally, to execute and deliver for and on
behalf of the Company the certificates required by the Note
Purchase Agreement in respect of the issuance and sale of the
Accepted Notes; and
RESOLVED, that the Authorized Officers and any person or
persons designated and authorized so to act by any Authorized
Officer are hereby each severally authorized to do and perform or
cause to be done and performed, in the name and on behalf of the
Company, all other acts, to pay or cause to be paid, on behalf of
the Company, all related costs and expenses and to execute and
deliver or cause to be executed and delivered such other notices,
requests, demands, directions, consents, approvals, orders,
applications, agreements, instruments, certificates, undertakings,
supplements, amendments, further assurances or other communications
of any kind, under the corporate seal of the Company or otherwise
and in the name of and on behalf of the Company or otherwise, as
he, she or they may deem necessary, advisable or appropriate to
effect the intent of the foregoing Resolutions or to comply with
the requirements of the instruments approved and authorized by the
foregoing Resolutions, including but not limited to the Note
Purchase Agreement and the Accepted Notes; and
RESOLVED, that any acts of any Authorized Officer of the
Company and of any person or persons designated and authorized to
act by any Authorized Officer of the Company, which acts would have
been authorized by the foregoing Resolutions except that such acts
were taken prior to the adoption of such Resolutions, are hereby
severally ratified, confirmed, approved and adopted as the acts of
the Company; and
RESOLVED, that each of the Secretary and each Assistant
Secretary of the Company is hereby severally authorized and
empowered to certify to the passage of the foregoing Resolutions
under the seal of this Company or otherwise.<PAGE>
Attachment B
Bylaws of the Company
[To be supplied by the Company upon delivery.]
<PAGE>
Attachment C
Long Form Good Standing Certificate of the Company
[To be supplied by the Company upon delivery.]
<PAGE>
EXHIBIT F2
[FORM OF SECRETARY'S CERTIFICATE OF THE GUARANTOR]
HUDSON FARMS, INC.
CERTIFICATE OF [ASSISTANT] SECRETARY
I, ______, hereby certify that I am the duly elected,
qualified and acting [Assistant] Secretary of HUDSON FARMS, INC.
(the "Guarantor"), an Arkansas corporation, and that, as such, I
have access to its corporate records and am familiar with the
matters herein certified, and I am authorized to execute and
deliver this Certificate in the name and on behalf of the
Guarantor, and that:
1. This certificate is being delivered pursuant to Section
3.3 of the Note Purchase Agreement (the "Note Purchase Agreement"),
dated as of May 18, 1994, among Hudson Foods, Inc., the Guarantor,
and the purchasers named on Annex 1 thereto (the "Purchasers").
The terms used in this Certificate and not defined herein have the
respective meanings specified in the Note Purchase Agreement.
2. Attached hereto as Attachment A is a true and correct
copy of resolutions, and the preamble thereto, adopted by the Board
of Directors of the Guarantor on ______ __, 1994, and such
resolutions and preamble set forth in Attachment A hereto were duly
adopted by said Board of Directors and are in full force and effect
on and as of the date hereof, not having been amended, altered or
repealed, and such resolutions are filed with the records of the
Board of Directors.
3. The documents listed below were executed and delivered
by the Guarantor pursuant to and in accordance with the resolutions
set forth in Attachment A hereto and said documents as executed are
substantially in the form submitted to and approved by the Board
of Directors of the Guarantor as aforementioned:
(a) the Note Purchase Agreement providing for, inter
alia,
(i) the sale by the Company and the purchase by the
Purchasers of the Company's Fixed Rate Senior Notes, in
the aggregate principal amount of Fifty Million Dollars
($50,000,000) (the "Notes"), from time to time, and
(ii) the guaranty by the Guarantor of the
obligations of the Company set forth in the Note Purchase
Agreement and the Notes; and
(b) the Notes being purchased by the Purchasers on the
date hereof in the aggregate principal amount of [__________]
Dollars ($[_______]) designated as the Series [__] Notes (the
"Accepted Notes").
4. Attached hereto as Attachment B is a true, correct and
complete copy of the bylaws of the Guarantor as in full force and
effect on and as of the date hereof, which bylaws were last amended
by the Board of Directors of the Guarantor on, and have been in
full effect in said form at all times from ______ __, ____ [date
prior to adoption of resolutions] to the date hereof, inclusive,
without modification or amendment in any respect.
5. Each of the following named persons is and has been a
duly elected, qualified and acting officer of the Guarantor holding
the office or offices set forth below opposite his or her name from
______ __, ____ [date of adoption of resolutions] to the date
hereof, inclusive:
[List Only Officers Executing Documents]
Name<PAGE>
Office Signature
<PAGE>
[Chairman of the
Board]<PAGE>
/s/
<PAGE>
[President] /s/
<PAGE>
[Vice President,
Finance]<PAGE>
/s/
<PAGE>
[Secretary] /s/
<PAGE>
[Assistant
Secretary]<PAGE>
/s/
<PAGE>
[Treasurer] /s/
<PAGE>
[Comptroller] /s/
6. The signature appearing opposite the name of each such
person set forth above is his or her genuine signature.
ST Attached hereto as Attachment C is a long-form good
standing certificate in respect of the Guarantor from the State of
Arkansas which certificate
(a) lists all corporate documents filed with the
Secretary of State of Arkansas on or prior to the date hereof
in respect of the Guarantor,
(b) has attached copies of such documents,
(c) bears the certification of the Secretary of State
of Arkansas, and
(d) is true, correct and complete.
8. There have been no amendments or supplements to or
restatements of the articles of incorporation of the Guarantor
since ______ __, 19__ [date preceding date of copy certified by
Sec. of State].
IN WITNESS WHEREOF, I have hereunto set my hand on ______ __,
____. [Closing Date]
HUDSON FARMS, INC.
Secretary <PAGE>
Attachment A
BOARD OF DIRECTORS
HUDSON FARMS, INC.
RESOLUTIONS ADOPTED
WHEREAS, there has been submitted to this Board a draft of the
form of Note Purchase Agreement (together with all exhibits and
schedules thereto, referred to herein as the "Note Purchase
Agreement"), to be entered into by Hudson Foods, Inc. (the
"Company"), this corporation (the "Guarantor"), and each of the
purchasers listed on Annex 1 thereto (together with any affiliate
of any thereof, the "Purchasers") pursuant to which (i) the
Purchasers will purchase, from time to time, the Company's Fixed
Rate Senior Notes, in the aggregate principal amount of up to Fifty
Million Dollars ($50,000,000) (the "Notes"), and (ii) the Guarantor
will, inter alia, guaranty the obligations of the Company set forth
in the Note Purchase Agreement and the Notes; and
WHEREAS, the Guarantor is a wholly-owned subsidiary of the
Company and this Board has determined that the Guarantor will
derive substantial benefits from the sale of the Notes by the
Company from time to time and the Guarantor's guaranty of the
Company's obligations set forth in the Note Purchase Agreement and
the Notes; and
WHEREAS, on the basis of its review of the Note Purchase
Agreement and of the principal terms and provisions of the
transactions provided for therein, this Board deems it advisable
and in the best interest of the Guarantor that the transactions
provided in the Note Purchase Agreement be consummated
substantially in accordance with the provisions thereof; and
WHEREAS, terms used in these preambles and resolutions and not
herein defined shall have the respective meanings ascribed to them
in the Note Purchase Agreement;
NOW THEREFORE, BE IT RESOLVED, that the form of, and each of
the terms and provisions contained in, the Note Purchase Agreement,
are hereby authorized and approved in each and every respect; and
each and every transaction effected or to be effected pursuant to
and substantially in accordance with the terms of the Note Purchase
Agreement, including, but not limited to, each specific transaction
that is described, authorized and approved in these resolutions,
is hereby authorized and approved in each and every respect;
RESOLVED, that the Guarantor enter into a Note Purchase
Agreement with each of the Purchasers or any affiliate thereof, and
that each of the Chairman of the Board, the President, any Vice
President, the Treasurer and each other officer of the Guarantor
(each an "Authorized Officer") is hereby severally authorized to
execute and deliver, in the name and on behalf of the Guarantor,
the Note Purchase Agreement substantially in the form thereof
presented to this Board and heretofore approved, with such changes
therein as shall be approved by the officer executing and
delivering the same, such approval to be evidenced conclusively by
such execution and delivery; and
RESOLVED, that the Guarantor guaranty the obligations of the
Company as provided in the Note Purchase Agreement, in the amounts
and upon the terms and conditions provided for in the Note Purchase
Agreement, including, without limitation, the Unconditional
Guaranty; and that each of the Authorized Officers is hereby
severally authorized to execute and deliver such further
instruments and agreements to further effectuate such Unconditional
Guaranty (including, without limitation, the confirmation of the
Unconditional Guaranty set forth on each of the Notes to be issued
by the Company pursuant to the Note Purchase Agreement), in the
name and on behalf of the Guarantor, as shall be approved by any
such Authorized Officer, such approval to be evidenced conclusively
by such execution and delivery; and
RESOLVED, that this Board hereby authorizes each of the
Authorized Officers, severally, to execute and deliver for and on
behalf of the Guarantor the certificates required from time to time
by the Note Purchase Agreement; and
RESOLVED, that the Authorized Officers and any person or
persons designated and authorized so to act by any Authorized
Officer are hereby each severally authorized to do and perform or
cause to be done and performed, in the name and on behalf of the
Guarantor, all other acts, to pay or cause to be paid, on behalf
of the Guarantor, all related costs and expenses and to execute and
deliver or cause to be executed and delivered such other notices,
requests, demands, directions, consents, approvals, orders,
applications, agreements, instruments, certificates, undertakings,
supplements, amendments, further assurances or other communications
of any kind, under the corporate seal of the Guarantor or otherwise
and in the name of and on behalf of the Guarantor or otherwise, as
he, she or they may deem necessary, advisable or appropriate to
effect the intent of the foregoing Resolutions or to comply with
the requirements of the instruments approved and authorized by the
foregoing Resolutions, including but not limited to the Note
Purchase Agreement and the Notes; and
RESOLVED, that any acts of any Authorized Officer of the
Guarantor and of any person or persons designated and authorized
to act by any Authorized Officer of the Guarantor, which acts would
have been authorized by the foregoing Resolutions except that such
acts were taken prior to the adoption of such Resolutions, are
hereby severally ratified, confirmed, approved and adopted as the
acts of the Guarantor; and
RESOLVED, that each of the Secretary and each Assistant
Secretary of the Guarantor is hereby severally authorized and
empowered to certify to the passage of the foregoing Resolutions
under the seal of the Guarantor or otherwise.<PAGE>
Attachment B
Bylaws of the Guarantor
[To be supplied by the Guarantor upon delivery.]
<PAGE>
Attachment C
Long Form Good Standing Certificate of the Guarantor
[To be supplied by the Guarantor upon delivery.]<PAGE>
EXHIBIT G
[FORM OF BANK CREDIT AGREEMENT]
[TO BE PREPARED BY COUNSEL TO THE BANKS]
PAGE
<PAGE>
Exhibit 11 - EARNINGS PER SHARE CALCULATION
HUDSON FOODS INC. AND SUBSIDIARIES
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
JULY 2, JULY 3, JULY 2, JULY 3,
1994 1993 1994 1993
<S> <C> <C> <C> <C>
Net income $8,831 $4,991 $19,298 $11,125
Interest on convertible
subordinated debentures
net of income taxes 217 219 646 --
__________ _________ _________ ________
Adjusted net income $9,048 $5,210 $19,944 $11,125
========== ========= ========= ========
Primary earnings per share:
Weighted average number of
common shares outstanding 16,268,439 16,163,726 16,211,280 15,165,158
Common stock equivalents:
Dilutive options 428,931 356,878 374,075 358,621
__________ __________ __________ __________
Weighted average number of
common and common equivalent
shares 16,697,370 16,520,604 16,585,355 15,523,779
========== ========== ========== ==========
Primary earnings per share $0.53 $0.30 $1.16 $0.72
========== ========== ========== ==========
Fully diluted earnings
per share:
Weighted average number of
common shares outstanding 16,268,439 16,163,726 16,211,280 15,165,158
Common stock equivalents:
Dilutive options 474,103 356,878 474,103 358,621
Convertible subordinated
debentures 830,286 830,286 830,286 --
__________ __________ __________ __________
Weighted average number of
common and common equivalent
shares 17,572,828 17,350,890 17,515,669 15,523,779
========== ========== ========== ==========
Fully diluted earnings per
share $0.52 $0.30 $1.14 $0.72
========== ========== ========== ==========
/TABLE
<PAGE>
PAGE
<PAGE>
EXHIBIT 15
HUDSON FOODS, INC. AND SUBSIDIARIES
LETTER REGARDING UNAUDITED INTERIM FINANCIAL INFORMATION
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Hudson Foods, Inc.
Registration on Forms S-8
We are aware that our report dated July 22, 1994 on our review of
the interim financial information of Hudson Foods, Inc. for the
period ended July 2, 1994, and included in this Form 10-Q is
incorporated by reference in the Company's registration statement
on Form S-8 (File nos. 33-7261, 33-27738 and 33-36690). Pursuant
to Rule 436(c) under the Securities Act of 1933, this report should
not be considered a part of the registration statement prepared or
certified by us within the meaning of Sections 7 and 11 of that
Act.
Coopers & Lybrand
Tulsa, Oklahoma
July 22, 1994
<PAGE>
