EXHIBIT 4.8 SMITHFIELD FOODS, INC. AMENDED AND RESTATED NOTE PURCHASE AGREEMENT DATED AS OF OCTOBER 29, 2004

EXHIBIT 4.8

 

SMITHFIELD FOODS, INC.

 

 

AMENDED AND RESTATED

NOTE PURCHASE AGREEMENT

 

 

D ATED AS OF O CTOBER 29, 2004

 

$25,000,000 R ESET R ATE S ERIES O 5/10 Y EAR S ENIOR S ECURED N OTES

$30,000,000 A DJUSTABLE R ATE S ERIES P 5/10 Y EAR S ENIOR S ECURED N OTES

 

Guarantied By:

 

Brown’s of Carolina LLC

Brown’s Farms, LLC

Brown’s Realty Partnership

Carroll’s Foods of Virginia LLC

Carroll’s Foods LLC

Carroll’s Realty Partnership

Cattle Production Systems, Inc.

Central Plains Farms LLC

Circle Four LLC

Coddle Roasted Meats, Inc.

Gwaltney of Smithfield, Ltd.

Hancock’s Old Fashioned Country Ham, Inc.

Iowa Quality Meats, Ltd.

John Morrell & Co.

Lykes Meat Group, Inc.

Moyer Packing Company

Murphy-Brown LLC

Murphy Farms LLC

North Side Foods Corp.

Packerland Holdings, Inc.

Packerland Processing Company, Inc.

Packerland-Plainwell, Inc. (f/k/a Murco Foods, Inc.)

Patrick Cudahy Incorporated

Premium Pork, Inc.

Quarter M Farms LLC

Quik-To-Fix Foods, Inc.

SFFC, Inc.

Smithfield Purchase Corporation

Stadler’s Country Hams, Inc.

Sun Land Beef Company

Sunnyland, Inc.

Smithfield-Carroll’s Farms

The Smithfield Companies, Inc.

The Smithfield Packing Company Incorporated

Smithfield Packing Real Estate, LLC

Smithfield Packing Realty Partnership

TABLE OF CONTENTS

 

 

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Annexes and Exhibits

 

 

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SMITHFIELD FOODS, INC.

 

AMENDED AND RESTATED

NOTE PURCHASE AGREEMENT

 

$25,000,000 R ESET R ATE S ERIES O 5/10 Y EAR S ENIOR S ECURED N OTES

$30,000,000 A DJUSTABLE R ATE S ERIES P 5/10 Y EAR S ENIOR S ECURED N OTES

 

Dated as of October 29, 2004

 

Separately addressed to each of the

Noteholders listed on Annex 1 hereto:

 

Ladies and Gentlemen:

 

SMITHFIELD FOODS, INC., a Virginia corporation (together with its successors and assigns, the “Company” ) , hereby agrees with you as follows:

 

1. BACKGROUND; AMENDMENT AND RESTATEMENT.

 

1.1 Background.

 

The Company has issued and sold

 

(a) twenty-five million dollars ($25,000,000) in aggregate principal amount of its Reset Rate Series O 5/10 Year Senior Secured Notes (as they may be amended, restated or otherwise modified from time to time, the “ Series O Notes ” such term to include each Series O Note delivered from time to time in accordance with any of the Note Purchase Agreements(as defined below)); and

 

(b) thirty million dollars ($30,000,000) in aggregate principal amount of its Adjustable Rate Series P 5/10 Year Senior Secured Notes (as they may be amended, restated or otherwise modified from time to time, the “ Series P Notes ” such term to include each Series P Note delivered from time to time in accordance with any of the Note Purchase Agreements).

 

The Series O Notes and the Series P Notes are herein referred to, individually, as a “ Note ” and collectively, as the “ Notes ”. The Notes have been issued pursuant to those separate Note Purchase Agreements each dated as of March 1, 2002 among the Company and the noteholders named in Annex 1 thereto (as amended by that certain Amendment Agreement No. 1, dated as of December 31, 2002, that certain Amendment Agreement No. 2, dated as of April 4, 2003, that certain Amendment Agreement No. 3, dated as of October 31, 2003, and that certain Amendment Agreement No. 4, dated as of March 25, 2004, each among the Company and the other parties listed on the signature pages thereto, each an “ Existing Note Purchase Agreement ” and collectively, the “ Existing Note Purchase Agreements ”). The Company represents and warrants to each of you that (i) the register kept by the Company for the registration and transfer of the Notes indicates that each of the Persons named in Annex 1 hereto (collectively, the

“ Noteholders ”) is currently a holder of the outstanding aggregate principal amount of the Notes as of the date hereof indicated in such Annex and (ii) there are no other Notes outstanding under the Existing Note Purchase Agreements.

 

1.2 Agreement of Noteholders to Amendment and Restatement; Closing Date.

 

(a) Agreement. Subject to the satisfaction of the conditions set forth in Section 3, you agree, by execution of this Agreement, that the Existing Note Purchase Agreement is hereby amended and restated in the form of this Agreement

 

(b) Closing Date; Restatement Date. The closing of the transactions contemplated by this Agreement is deemed to be March 1, 2002 (the “ Closing Date ”) and the closing under this Agreement will be held contemporaneously with the execution and delivery of this Agreement (the date of such closing is herein referred to as the “ Restatement Date ”) at the office of Bingham McCutchen LLP, One State Street, Hartford, Connecticut, 06103. It is agreed that the Restatement Date shall be October 29, 2004.

 

(c) Other Noteholders . Contemporaneously with the execution and delivery hereof, the Company is entering into a separate Amended and Restated Note Purchase Agreement identical (except for the name, address and signature of the Noteholder party thereto) to this Agreement (this Agreement and such other separate Amended and Restated Note Purchase Agreements, collectively, as may be amended from time to time, the “ Note Purchase Agreements ”) with each other Noteholder.

 

1.3 Failure To Deliver, Failure of Conditions.

 

If on the Restatement Date the conditions specified in Section 3 to be fulfilled have not been fulfilled, you may thereupon elect to be relieved of all further obligations under this Agreement, without thereby waiving any rights you may have by reason of such nonfulfillment, and the Existing Note Purchase Agreement shall remain in full force.

 

1.4 Expenses.

 

(a) Generally. Whether or not the transactions contemplated by this Agreement are consummated, 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 cost of reproducing the Financing Documents;

 

(ii) the fees and disbursements of your special counsel;

 

(iii) the fees and disbursements of the Security Trustee and its counsel;

 

(iv) the fees, expenses and costs incurred in complying with each of the conditions to closing set forth in Section 3;

 

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(v) all other expenses incurred in connection with the transactions contemplated by this Agreement; and

 

(vi) the expenses relating to the consideration, negotiation, preparation or execution of any amendments, waivers or consents pursuant to the provisions hereof and of the other Financing Documents, whether or not any such amendments, waivers or consents are executed.

 

(b) Counsel. Without limiting the generality of the foregoing, it is agreed and understood that the Company will pay, on the Restatement Date, the statement for fees and disbursements of your special counsel presented on the Restatement Date and the Company will also pay upon receipt of any statement thereof, each additional statement for fees and disbursements of your special counsel rendered after the Restatement Date in connection with the matters referred to in Section 1.4(a)(vi).

 

(c) Survival. The obligations of the Company under this Section 1.4 shall survive the payment or prepayment of the Notes and the termination hereof.

 

1.5 Collateral; Release.

 

The Notes are secured pursuant to and entitled to all of the benefits of the Security Documents. In the event that at any time after the Restatement Date the Company shall have obtained an Acceptable Rating in respect of its long-term, senior unsecured debt, the Company may give written notice to each holder of Notes (which notice shall include copies of the letters to the Company from Moody’s and Standard & Poor’s evidencing that such Acceptable Rating has been in full force and effect for the one hundred eighty (180) day period immediately preceding the date of such notice) requesting that the holders of the Notes direct the Security Trustee to release the Collateral from the security interests created by the Security Documents on a date specified in such notice (the “ Collateral Release Date ”) that is not less than thirty (30) days and not more than sixty (60) days after the date of such notice. The holders of the Notes agree to direct the Security Trustee to so release the Collateral, provided that the Collateral Release Conditions have been satisfied and the holders of the Notes and the Security Trustee shall have received an officer’s certificate, executed by a Senior Officer and dated the Collateral Release Date, specifying that at the time of such release and after giving effect thereto, each of the Collateral Release Conditions are satisfied. Notwithstanding such release of Collateral, the provisions of Section 6.13 hereof shall continue to apply on and after the Collateral Release Date.

 

2. WARRANTIES AND REPRESENTATIONS.

 

To induce you to enter into this Agreement, the Company warrants and represents as follows:

 

2.1 Material Adverse Change.

 

Since the date of the last audited consolidated financial statements of the Company delivered to each of the Noteholders (or their predecessors in interest), there has been no change

 

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in the business, prospects, profits, Properties or condition (financial or otherwise) of the Company, except changes that, in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

 

2.2 Financial Statements; Debt.

 

(a) Financial Statements. The quarterly and annual financial statements most recently delivered to you pursuant to Section 7.1 of the Existing Note Purchase Agreement have been prepared in accordance with GAAP consistently applied and present fairly, in all material respects, the consolidated financial position of the Company and its consolidated subsidiaries as of such dates and the results of their operations and cash flows for the periods specified therein.

 

(b) Debt. Part 2.2(b) of Annex 2 lists all Debt of the Company and the Subsidiaries as of the Closing Date (prior to giving effect to the transactions which occurred on the Closing Date) which Debt is of an outstanding amount, in each case, in excess of fifty thousand dollars ($50,000), and provides the following information with respect to each item of such Debt:

 

(i) the obligor in respect thereof,

 

(ii) the holder thereof,

 

(iii) the outstanding amount thereof and the interest rate or rates applicable thereto,

 

(iv) the portion thereof classified as current in accordance with GAAP,

 

(v) the final maturity thereof, and

 

(vi) the collateral securing such Debt, if any.

 

The aggregate amount of Debt of the Company and the Subsidiaries as of the Closing Date that is not set forth on Part 2.2(b) of Annex 2 does not exceed two million five hundred thousand dollars ($2,500,000).

 

2.3 Subsidiaries and Affiliates.

 

Part 2.3 of Annex 2 states:

 

(a) the name of each of the Subsidiaries as of the Restatement Date, its jurisdiction of organization and the percentage of its Voting Stock owned by the Company and each other Subsidiary; and

 

(b) the name of each of the Affiliates as of the Restatement Date and the nature of the affiliation.

 

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Each of the Company and the Subsidiaries has good and marketable title to all of the shares it purports to own of the stock of each Subsidiary, free and clear in each case of any Lien. All such shares have been duly issued and are fully paid and nonassessable.

 

2.4 Pending Litigation.

 

(a) Pending Litigation. There are no proceedings, actions or investigations pending or, to the knowledge of the Company, threatened against or affecting the Company or any Subsidiary in any court or before any Governmental Authority or arbitration board or tribunal that, in the aggregate for all such proceedings, actions and investigations, could reasonably be expected to have a Material Adverse Effect.

 

(b) No Defaults. Neither the Company nor any Subsidiary is in default with respect to any judgment, order, writ, injunction or decree of any court, Governmental Authority, arbitration board or tribunal that, in the aggregate for all such defaults, could reasonably be expected to have a Material Adverse Effect.

 

2.5 Title to Properties; UCC Matters.

 

(a) Title to Properties. The Company and the Subsidiaries have valid title to all of the Property reflected in the most recent audited consolidated balance sheet referred to in Section 2.2(a) (except as sold or otherwise disposed of in the ordinary course of business), except for such failures to have valid title as are immaterial in the context of such balance sheet and that, in the aggregate for all such failures, could not reasonably be expected to have a Material Adverse Effect.

 

(b) Leases. All leases necessary for the conduct of the business of the Company and the Subsidiaries are valid and subsisting and are in full force and effect, except for such failures to be valid and subsisting that, in the aggregate for all such failures, could not reasonably be expected to have a Material Adverse Effect.

 

(c) Liens. All Property of the Company and the Subsidiaries is free from Liens not permitted by Section 6.13.

 

(d) UCC Matters. Part 2.5(d) of Annex 2 sets forth with respect to the Company and each Guarantor, as of the Closing Date:

 

(i) each name under which such Person conducts or has conducted all or a portion of its business operations, and

 

(ii) the location of the principal executive office of each such Person.

 

Neither the Company nor any Guarantor has changed its name or the name under which it conducts its business operations within the immediately preceding period of five (5) years.

 

(e) Real Estate Collateral. Part 2.5(e) of Annex 2 sets forth a list, as of the Closing Date, of each of the real Properties held by each of Packerland, Murco, and Sun

 

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Land, and such list sets forth, as of the Closing Date, with respect to each such Property that constitutes Collateral, the book value and the Company’s good faith estimate of the Fair Market Value thereof.

 

2.6 Patents, Trademarks, Licenses, etc.

 

Except as set forth on Part 2.6 of Annex 2, as of the Closing Date each of the Company and the Subsidiaries owns, possesses or has the right to use all of the patents, trademarks, service marks, trade names, copyrights and licenses, and rights with respect thereto, necessary for the present and currently planned future conduct of its business, without any known conflict with the rights of others. The Trademark Subsidiaries own all such patents, trademarks, service marks, trade names, copyrights and licenses. Part 2.6 of Annex 2 sets forth the identity of each of the Trademark Subsidiaries on the Closing Date.

 

2.7 Taxes.

 

(a) Returns Filed; Taxes Paid. All tax returns required to be filed by each of the Company and the Subsidiaries and any other Person with which the Company or any Subsidiary files or has filed a consolidated return in any jurisdiction have in fact been filed on a timely basis, and all taxes, assessments, fees and other governmental charges upon each of the Company and the Subsidiaries and any such Person, and upon any of their respective Properties, income or franchises, that are due and payable have been paid. As of the Closing Date, all liabilities of the Company and the Subsidiaries with respect to federal income taxes have been finally determined except with respect to the fiscal years disclosed on Part 2.7 of Annex 2, which are the only fiscal years not closed by the completion of an audit or the expiration of the statute of limitations. There is currently in effect no tax sharing, tax allocation or similar agreement providing for the manner in which tax payments (whether in respect of federal or state income or other taxes) owing by the members of the affiliated group of which the Company is the “common parent” (as defined in section 1504 of the IRC) are allocated between any member of such group and any Person other than the Company or a Subsidiary.

 

(b) Book Provisions Adequate.

 

(i) The amount of the liability for taxes reflected in the most recent balance sheet referred to in Section 2.2(a) is an adequate provision for taxes as of the date of such balance sheet (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, any Subsidiary 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) As of the Closing Date, neither the Company nor any Subsidiary knows 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).

 

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2.8 Full Disclosure.

 

The financial statements referred to in Section 2.2(a) do not, nor does any Financing Document or any written statement furnished by or on behalf of the Company or any Subsidiary to you in connection with the negotiation or the closing of the transactions contemplated by this Agreement, contain any untrue statement of a material fact or omit a material fact necessary to make the statements contained therein not misleading when viewed in the aggregate. There is no fact that the Company has not disclosed to you in writing that has had or, so far as the Company can now reasonably foresee, could reasonably be expected to have a Material Adverse Effect.

 

2.9 Corporate Organization and Authority.

 

The Company and each Subsidiary:

 

(a) is a corporation, limited liability company or partnership duly organized, validly existing and in good standing (to the extent that such concept is applicable) under the laws of its jurisdiction of organization;

 

(b) has all legal and corporate, limited liability company or partnership, as the case may be, 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 necessary licenses, certificates and permits 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 and permits, in the aggregate, 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, limited liability company or foreign partnership, as the case may be, in each state in the United States of America and in each other jurisdiction where the failure to be so qualified or licensed and authorized and in good standing, in the aggregate for all such failures, could reasonably be expected to have a Material Adverse Effect.

 

2.10 Restrictions on Company and Subsidiaries.

 

(a) Neither the Company nor any Subsidiary:

 

(i) is a party to any contract or agreement, or subject to any charter, bylaw, partnership agreement or other restriction that, in the aggregate for all such contracts, agreements, constitutive documents and other restrictions (assuming that all such contracts and agreements are performed in accordance with their respective terms), could reasonably be expected to have a Material Adverse Effect; or

 

(ii) 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 6.13.

 

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(b) As of the Closing Date, neither the Company nor any Guarantor is a party to any contract or agreement that restricts the right or ability of the Company or such Guarantor to incur Debt, other than this Agreement and the agreements listed in Part 2.10(b) of Annex 2 (none of which restricts the issuance and sale of the Notes or the performance of the Company hereunder or under the Notes and none of which restricts the guaranty of the Notes by any of the Guarantors under the Joint and Several Guaranty).

 

2.11 Compliance with Law.

 

Neither the Company nor any Subsidiary:

 

(a) is in violation of any law, ordinance, governmental rule or regulation to which it is subject (including, without limitation, those relating to zoning and planning, building, subdivision, inland wetland and environmental and hazardous waste disposal); or

 

(b) has failed to obtain any license, certificate, permit, franchise or other governmental authorization necessary to the ownership of its Property or to the conduct of its business (including, without limitation, to the extent required, building, zoning, subdivision, traffic and environmental approvals and certificates of occupancy);

 

which violations or failures to obtain, in the aggregate, could reasonably be expected to have a Material Adverse Effect.

 

2.12 Pension Plans.

 

(a) Disclosure. Part 2.12(a) of Annex 2 identifies as of the Closing Date all ERISA Affiliates and all “employee benefit plans” with respect to which the Company or any “affiliate” of the Company is a “party-in-interest” or in respect of which the Notes could constitute an “employer security” (“employee benefit plan” and “party-in-interest” have the meanings specified in section 3 of ERISA and “affiliate” and “employer security” have the meanings specified in section 407(d) of ERISA).

 

(b) Prohibited Transactions. The execution and delivery of this Agreement will not involve any transaction that is subject to the prohibitions of section 406 of ERISA or in connection with which a tax could be imposed pursuant to section 4975(c)(1)(A) through section 4975(D), inclusive, of the IRC.

 

(c) Relationship of Vested Benefits to Pension Plan Assets. Except as set forth on Part 2.12(c) of Annex 2, immediately prior to the Closing Date the present value of all benefits, determined as of the most recent valuation date immediately prior to the Closing Date for such benefits (as provided in Section 6.21(c)), 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 the most recent valuation date (as provided in Section 6.21(c)) immediately prior to the Closing Date.

 

(d) ERISA Requirements. Each of the Company and the ERISA Affiliates:

 

(i) has fulfilled all obligations under the minimum funding standards of ERISA and the IRC with respect to each Pension Plan that is not a Multiemployer Plan;

 

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(ii) is in compliance in all material respects with all other applicable provisions of ERISA and the IRC with respect to each Pension Plan and each Multiemployer Plan; and

 

(iii) has not incurred any liability under Title IV of ERISA to the PBGC (other than in respect of required insurance premiums, all of which that are due having been paid), with respect to any Pension Plan, any Multiemployer Plan or any trust established thereunder.

 

(e) Accumulated Funding Deficiency. Except as set forth in Part 2.12(e) of Annex 2, no accumulated funding deficiency (as defined in section 302 of ERISA and section 412 of the IRC), whether or not waived, exists as of the Closing Date with respect to any Pension Plan.

 

(f) Reportable Events. No Pension Plan or trust created thereunder has been terminated, and there have been no “reportable events” (as such term is defined in section 4043 of ERISA), with respect to any Pension Plan or trust created thereunder or with respect to any Multiemployer Plan, which reportable event or events will or could result in the termination of such Pension Plan or Multiemployer Plan and give rise to a liability of the Company or any ERISA Affiliate in respect thereof.

 

(g) Multiemployer Plans. Other than as set forth on Part 2.12(g) of Annex 2, as of the Closing Date neither the Company nor any ERISA Affiliate is an employer required to contribute to any Multiemployer Plan. Neither the Company nor any ERISA Affiliate has incurred, nor is expected to incur, any withdrawal liability (that has not previously been fully satisfied) under ERISA with respect to any Multiemployer Plan, the effect of which, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. No Multiemployer Plans have been terminated under section 4041A of ERISA, have been placed in reorganization status under Title IV of ERISA, or have been determined to be “insolvent” (as such term is defined in section 4245 of ERISA).

 

(h) Multiple Employer Pension Plans. Neither the Company nor any ERISA Affiliate is a “contributing sponsor” (as such term is defined in section 4001 of ERISA) in any Multiple Employer Pension Plan and neither the Company nor any ERISA Affiliate has incurred (without fully satisfying the same), or reasonably expects to incur, withdrawal liability in respect of any Multiple Employer Pension Plan, which withdrawal liability could reasonably be expected to have a Material Adverse Effect.

 

(i) Foreign Pension Plan. Except as set forth in Part 2.12(i) of Annex 2, as of the Closing Date no Foreign Pension Plans exist as of the Closing Date and neither the Company nor any Subsidiary has any present or future obligations in respect of any Foreign Pension Plan.

 

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2.13 USA Patriot Act, Etc.

 

(a) Neither the Company nor any Subsidiary (i) is a Person described or designated in the Specially Designated Nationals and Blocked Persons List of the Office of Foreign Assets Control or in Section 1 of the Anti-Terrorism Order or (ii) engages in any dealings or transactions with any such Person. The Company and its Subsidiaries are in compliance, in all material respects, with the USA Patriot Act.

 

(b) No part of the proceeds from the sale of the Notes hereunder will be used, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended, assuming in all cases that such Act applies to the Company.

 

2.14 Certain Laws.

 

The execution and delivery of this Agreement by the Company and each of the Guarantors and the performance under the Financing Documents by the Company and the Subsidiaries:

 

(a) is not subject to regulation under the Investment Company Act of 1940, as amended, the Public Utility Holding Company Act of 1935, as amended, the Transportation Acts, as amended, or the Federal Power Act, as amended, and

 

(b) does not violate any provision of any statute or other rule or regulation of any Governmental Authority applicable to the Company or any Subsidiary.

 

2.15 Environmental Compliance.

 

(a) Compliance. Except as set forth in Part 2.14(a) of Annex 2, as of the Closing Date neither the Company nor any Subsidiary is in violation of any Environmental Protection Law in effect in any jurisdiction where it currently is doing business or owns Property, except for such violations that, in the aggregate for all such violations, could not reasonably be expected to have a Material Adverse Effect.

 

(b) Liability. Except as set forth in Part 2.14(b) of Annex 2, as of the Closing Date neither the Company nor any Subsidiary is subject to any liability under any Environmental Protection Law that, in the aggregate for all such liabilities, could reasonably be expected to have a Material Adverse Effect.

 

(c) Notices. Except as set forth in Part 2.14(c) of Annex 2, as of the Closing Date neither the Company nor any Subsidiary has received any:

 

(i) notice from any Governmental Authority by which any of its currently 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 other clean-up site or candidate for removal or closure pursuant to any Environmental Protection Law;

 

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(ii) 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 currently or previously owned or leased Properties; or

 

(iii) communication from any Governmental Authority concerning any action or omission by the Company or such Subsidiary in connection with its currently or previously owned or leased Properties resulting in the release of any Hazardous Substance or resulting in any violation of any Environmental Protection Law;

 

in each case where the effect of which, in the aggregate for all such notices and communications, could reasonably be expected to have a Material Adverse Effect.

 

2.16 Transaction is Legal and Authorized; Obligations are Enforceable.

 

(a) Transaction is Legal and Authorized. Each of the execution and delivery of this Agreement by the Company and by each of the Guarantors and compliance by the Company and each of the Guarantors with all of their respective obligations under the Financing Documents:

 

(i) is within the corporate powers of the Company and each of the Guarantors;

 

(ii) is legal and does not conflict with, result in any breach in any of the provisions of, constitute a default under, or result in the creation of any Lien upon any Property of the Company or any Subsidiary under the provisions of, any agreement, charter instrument, bylaw or other instrument to which it is a party or by which it or any of its Property may be bound; and

 

(iii) does not give rise to a right or option of any other Person under any agreement or other instrument, which right or option could reasonably be expected to have a Material Adverse Effect.

 

(b) Obligations are Enforceable. This Agreement has been duly authorized by all necessary action on the part of each Obligor and has been executed and delivered by one or more duly authorized officers of such Obligor, and the obligations of each Obligor set forth herein constitute legal, valid and binding obligations of such Obligor, enforceable in accordance with its terms, except that the enforceability of the Financing Documents may be:

 

(i) limited by applicable bankruptcy, reorganization, arrangement, insolvency, moratorium or other similar laws affecting the enforceability of creditors’ rights generally; and

 

(ii) subject to the availability of equitable remedies.

 

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2.17 Governmental Consent.

 

Neither the nature of the Company or any Subsidiary, or of any of their respective businesses or Properties, nor any relationship between the Company or any Subsidiary and any other Person, nor any circumstance in connection with the execution and delivery of this Agreement, is such as to require a consent, approval or authorization of, or filing, registration or qualification with, any Governmental Authority on the part of the Company or any Guarantor as a condition to the execution and delivery of this Agreement.

 

2.18 No Defaults.

 

(a) The Agreement. No event has occurred and no condition exists that, upon the execution and delivery of this Agreement, would constitute a Default or an Event of Default.

 

(b) Charter Instruments, Other Agreements. Neither the Company nor any Subsidiary is in violation in any respect of any term of any charter instrument, bylaw, partnership agreement or other constitutive document or instrument. Neither the Company nor any Subsidiary is in violation in any respect of any term in any agreement or other instrument to which it is a party or by which it or any of its Property may be bound except for such violations that, in the aggregate for all such violations, could not reasonably be expected to have a Material Adverse Effect.

 

2.19 Company and the Guarantors.

 

The Company and the Guarantors 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 each of the Guarantors receive direct economic and financial benefits from the Debt outstanding under the Note Purchase Agreements by the Company and the existence of such Debt is in the best interests of the Company and each of the Guarantors.

 

2.20 Solvency.

 

The fair value of the business and assets of the Company and each Guarantor will be in excess of the amount that will be required to pay its liabilities (including, without limitation, contingent, subordinated, unmatured and unliquidated liabilities on existing debts, as such liabilities may become absolute and matured), in each case after giving effect to the transactions contemplated by this Agreement. Neither the Company nor any Guarantor, after giving effect to the transactions contemplated by this Agreement, will be engaged in any business or transaction, or about to engage in any business or transaction, for which such Person has unreasonably small assets or capital (within the meaning of applicable law, including, without limitation, Section 548 of the United States Bankruptcy Code), and neither the Company nor any Guarantor has any intent to

 

(a) hinder, delay or defraud any entity to which it is, or will become, on or after the Restatement Date, indebted, or

 

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(b) incur debts that would be beyond its ability to pay as they mature.

 

2.21 True and Correct Copies.

 

The Company has delivered to you or your special counsel true and correct copies of each of the following (including each amendment and restatement entered into in connection herewith): (a) the Credit Facility and any other Revolving Credit Agreement (including, without limitation, all schedules and exhibits thereto and all agreements delivered in connection therewith) of the Company or any Subsidiary, (b) the 1999 Note Purchase Agreements and (c) the 2000 Note Purchase Agreement.

 

2.22 Joinder Agreement.

 

Cattle Production Systems, Inc. (f/k/a Beef Production Systems, Inc.) shall have executed and delivered to you or your special counsel (i) that certain joinder agreement, dated on or before October 29, 2004, by which Cattle Production Systems, Inc. shall become a guarantor under the Joint and Several Guaranty and (ii) that certain joinder agreement, dated on or before October 29, 2004, by which Cattle Production Systems, Inc. shall become a subsidiary guarantor under the Intercreditor Agreement.

 

3. CLOSING CONDITIONS.

 

The effectiveness of this Agreement, as to the parties hereto, is subject to the following conditions precedent:

 

3.1 Opinions of Counsel.

 

You shall have received a closing opinion from McGuireWoods LLP, counsel for the Company and the Guarantors, dated as of the Restatement Date, and substantially in the form set forth in Exhibit B, and as to such other matters as you may reasonably request. The Company hereby requests and directs its counsel to deliver such closing opinion to you and the other Noteholders.

 

3.2 Warranties and Representations True.

 

The warranties and representations contained in Section 2 shall be true on the Restatement Date with the same effect as though made on and as of that date.

 

3.3 No Defaults.

 

No “Default” or “Event of Default” (as such terms are defined in the Existing Note Purchase Agreements) shall exist in respect of the Notes, this Agreement or the Existing Note Purchase Agreements.

 

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3.4 Officers’ Certificates.

 

You shall have received:

 

(a) a certificate dated the Restatement Date and signed by the President, a Vice President, the Controller, the Treasurer, an Assistant Treasurer or the Chief Financial Officer of the Company, substantially in the form of Exhibit C, certifying that the conditions specified in Sections 3.2, Section 3.3, Section 3.8 and Section 3.9 have been fulfilled and that no Default or Event of Default exists on the Restatement Date; and

 

(b) a certificate dated the Restatement Date and signed by the Secretary or an Assistant Secretary of the Company, substantially in the form of Exhibit D, with respect to the matters set forth therein.

 

3.5 Other Noteholders.

 

None of the other Noteholders shall have failed to execute and deliver a Note Purchase Agreement on the Restatement Date.

 

3.6 Expenses.

 

All fees and disbursements required to be paid on or before the Restatement Date pursuant to Section 1.4 shall have been paid in full.

 

3.7 Ratification by Guarantors.

 

Each Guarantor shall have executed and delivered the ratification of its obligations under the Joint and Several Guaranty as contemplated on the signature pages to this Agreement.

 

3.8 Other Debt Documents.

 

The Company shall have delivered to you a true and correct copy of the agreements referred to in Section 2.21.

 

3.9 Transaction Structuring Fee.

 

The Company shall have paid to each Noteholder a non-refundable transaction restructuring fee equal to five hundredths of one percent (0.05%) of the aggregate principal amount of the Notes held by such Noteholder on the Restatement Date.

 

3.10 Compliance with this Agreement.

 

Each of the Company and the Guarantors shall have performed and complied with all agreements and conditions contained herein that are required to be performed or complied with by the Company and the Guarantors on or prior to the Restatement Date, and such performance and compliance shall remain in effect on the Restatement Date.

 

3.11 Proceedings Satisfactory.

 

All proceedings taken in connection with the transactions contemplated hereby and all documents and papers relating thereto shall be satisfactory to you and your special counsel. You and your special counsel shall have received copies of such documents and papers as you or they

 

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may reasonably request in connection therewith or in connection with your special counsel’s closing opinion, all in form and substance satisfactory to you and your special counsel.

 

4. PAYMENTS.

 

4.1 Interest Payments.

 

(a) Series O Notes. The Series O Notes shall bear interest on the outstanding principal amount thereof at the rate of eight and sixty-three one-hundredths percent (8.63%) per annum and shall be payable to the holders of the Series O Notes, in arrears, monthly on the last day of each month in each year, commencing on March 31, 2002, until the principal amount of the Series O Notes in respect of which such interest shall have accrued shall become due and payable, and interest shall accrue on any overdue principal (including any overdue prepayment of principal) and Make-Whole Amount and (to the extent permitted by applicable law) on any overdue installment of interest, at a rate equal to the Series O Rate plus two percent (2%) per annum.

 

(b) Series P Notes. The Series P Notes shall bear interest on the outstanding principal amount thereof at a rate per annum equal to the Series P Rate determined in accordance with Section 4.1(d). Such interest shall be payable to the holders of the Series P Notes, in arrears, as determined in accordance with Section 4.1(d), until the principal amount of the Series P Notes in respect of which such interest shall have accrued shall become due and payable, and interest shall accrue on any overdue principal (including any overdue prepayment of principal) and Make-Whole Amount, if applicable, and (to the extent permitted by applicable law) on any overdue installment of interest, at a rate equal to the Series P Variable Rate plus two percent (2%) per annum.

 

(c) Basis of Computation. Interest on the Series O Notes shall be computed on the basis of a year of three hundred sixty (360) days comprised of twelve 30-day months. Interest on the Series P Notes shall be computed on the basis of a year of three hundred sixty (360) days and paid for the actual number of days elapsed, calculated as to each interest period or other period during which interest accrues from and including the first day thereof to and including the last day thereof. Interest determined at the Maximum Legal Rate of Interest shall be determined in accordance with Applicable Interest Law.

 

(d) Determination of Series P Rate.

 

(i) Initial Interest Rate; Series P Variable Rate. Notwithstanding the other provisions of this Section 4.1(d) (A) for the period from March 1, 2002 through April 30, 2002 the Series P Rate will be 4.37% per annum and (B) on April 30, 2002 the Company will pay interest on the Series P Notes in an amount equal to (1) $98,567.77 plus (2) interest accrued at the Series P Rate for the period from March 1, 2002 through April 30, 2002 as provided in clause (A) above. Except as provided in Section 4.1(d)(ii) and Section 4.1(d)(iii) or if the Company has been notified in writing by the Series P Agent that the right to select the Series P Variable Rate is cancelled or suspended, the Series P Notes shall bear interest

 

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after April 30, 2002 on the outstanding principal amount thereof at the Series P Variable Rate. Interest on the Series P Notes bearing interest at the Series P Variable Rate after April 30, 2002 shall be payable monthly in arrears on the last day of each calendar month commencing on May 31, 2002.

 

(ii) Series P LIBOR Rate. The Company may, at any time and from time to time, elect for any period after April 30, 2002 to have one or more portions (but no more than four (4) portions at any one time) of the then outstanding Series P Notes, in principal amounts of at least $1,000,000 and multiples of $500,000, bear interest at one of the three (3) Series P LIBOR Rates at such time, by providing written or telephonic notice of such election on any Banking Day to the Series P Agent, specifying the Series P Three-Month LIBOR Rate, the Series P Six-Month LIBOR Rate or the Series P Twelve-Month LIBOR Rate that has been selected by the Company and the respective principal amounts of the Series P Notes with respect to such selection is made. If such notice shall have been received by the Series P Agent not later than 12:00 noon, Central Standard Time, on the date such notice has been delivered, such Series P Notes so selected shall bear interest at the selected Series P LIBOR Rate commencing on the third (3 ^rd ) Banking Day following the date such notice shall have been so received; if such notice shall have been received by the Series P Agent after 12:00 noon, Central Standard Time, on the date such notice has been delivered, such Series P Notes so selected shall bear interest at the selected Series P LIBOR Rate commencing on the fourth (4th) Banking Day immediately following the date such notice shall have been so received. The Series P LIBOR Rate in respect of any such notice shall be determined on the date such notice shall have been received (regardless of the time of such receipt) by the Series P Agent.

 

If the Company, as specified in any such notice, shall select: (i) the Series P Three-Month LIBOR Rate, then such Series P Notes so selected shall bear interest at the Series P Three-Month LIBOR Rate for a period of ninety (90) days; (ii) the Series P Six-Month LIBOR Rate, then such Series P Notes so selected shall bear interest at the Series P Six-Month LIBOR Rate for a period of one hundred eighty (180) days; and (iii) the Series P Twelve-Month LIBOR Rate, then such Series P Notes so selected shall bear interest at the Series P Twelve Month LIBOR Rate for a period of three hundred sixty (360) days. Unless agreed to in writing by the Series P Agent, in no event will the Company be permitted to select any such Series P LIBOR Rates if the last day of any such period ends after July 31, 2006. If the last day of any of such periods is not a Banking Day, such period shall end on the next Banking Day unless such last day falls in the next calendar month, in which case such period shall end on the Banking Day immediately preceding such last day. If the last day of any such period falls on a day which is not numerically corresponding to the first day of such period such period shall end on the last day of the month which is closest to such last day. Commencing on the first (1 ^st ) day immediately following the final day of each such interest period (each, an “ Interest Period ”) and continuing thereafter, the Series P Notes shall bear interest (1) if the Company shall have provided, on or prior to 12:00 noon, Central Standard Time, on the third (3rd) Banking Day

 

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immediately prior to such date, written or telephonic notice to the Series P Agent of the applicable Series P LIBOR Rate so selected in accordance with the immediately preceding paragraph, at the Series P LIBOR Rate selected by the Company in such notice, or (2) in the event the Company shall not have provided any such notice, at either the then applicable Series P Variable Rate or, if so established as provided in Section 4.1(d)(iii) below, the Series P Fixed Rate. Interest on the Series P Notes bearing interest at a Series P LIBOR Rate shall be payable at ninety (90) day intervals commencing on the 90th day immediately following the first day of the applicable Interest Period.

 

(iii) Series P Fixed Rate. The Company may, at any time and from time to time up to and including July 1, 2006, request for any period commencing after April 30, 2002 to have one or more portions of the then outstanding Series P Notes, bear interest at the Series P Fixed Rate at such time, by providing written or telephonic notice of such request on any Business Day to the Series P Agent. Within three (3) Business Days following the receipt of such notice, the Series P Agent shall notify the Company, in writing or by telephone, of the Series P Fixed Rate, the applicable interest period (which in no event will end later than July 31, 2006 unless agreed to in writing by the Series P Agent) during which such Series P Fixed Rate will be in effect and the portions of the Series P Notes to which the Series P Fixed Rate will be applicable, each of which may be chosen by the Series P Agent in its sole discretion. The Company shall notify the Series P Agent, in writing or by telephone, of its acceptance or rejection of the Series P Fixed Rate within three (3) Business Days following receipt of notice of such Series P Fixed Rate. If so accepted, the portion of the Series P Notes designated to bear interest at the Series P Fixed Rate shall bear interest at the Series P Fixed Rate commencing on the first day of the period designated by the Series P Agent. Interest on Notes bearing interest at the Series P Fixed Rate shall be payable monthly in arrears on the last day of each calendar month. If the Series P Agent fails to respond to such notice within such three (3) Business Day period such failure shall be deemed to be a rejection of such Series P Fixed Rate.

 

(iv) Series P Rate Determination Binding. Each determination of a Series P Rate pursuant to the provisions of this Agreement shall be made by the Series P Agent and shall be conclusive and binding on the Company and the holders of the Series P Notes in the absence of manifest error. In the case of manifest error, any holder of a Series P Note or the Company may object to such quoted Series P Rate by written notice delivered to the Company or the Series P Agent, as the case may be, detailing the reasons for such objection. Upon delivery of any such notice of objection, the Series P Agent and the Company shall cooperate to promptly determine the correct Series P Rate and such correct Series P Rate shall be the then applicable Series P Rate for the applicable Series P Notes. Each of the holders of the Series P Notes and the Company shall make the required adjustments to the amount of interest payable on the first interest payment date next succeeding the date of the determination of the correct Series P Rate as are necessary to reflect the application of such correct Series P Rate.

 

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(v) Inability to Determine Rate. If, in the reasonable opinion of the Series P Agent, the market for United States dollar deposits in London ceases to function, or it becomes impossible, impractical or illegal to readily, currently and accurately determine the applicable Series P LIBOR Rate, or the applicable Series LIBOR Rate no longer currently and accurately reflects the market level of interest rates for obligations of a similar nature, term and amount, then the Series P Agent, in each such case, shall forthwith give notice thereof to the Company. If such notice is given, (A) the interest rate applicable to the Series P Notes shall be the Prime Rate or another rate mutually acceptable to the Company and the Series Agent at such time, determined and effective as of the first day of the relevant interest period, and (B) each reference herein to the “Series P LIBOR Rate” or “Series P Variable Rate”, as the case may be, shall be deemed thereafter to be a reference to the Prime Rate or such other rate.

 

(vi) Reinstatement of Rate. If there has been at any time an interest rate substituted for the Series P LIBOR Rate or Series P Variable Rate in accordance with Section 4.1(d)(v) and thereafter, in the Series P Agent’s reasonable opinion, the circumstances causing such substitution have ceased, then the Series P Agent shall promptly notify in writing the Company of such cessation or election, and on the first (1st) Banking Day immediately following the date such notice shall have been delivered, the Series P Notes shall bear interest at the Series P Variable Rate (determined on such first (1st) Banking Day and redetermined thereafter in accordance with Section 4.1(d)(i)) and the Series P LIBOR Rate shall be determined as originally defined hereby. Nevertheless, the provisions of Section 4.1(d)(v) shall generally continue to be effective.

 

(vii) Indemnity. In the event any payment or prepayment of the Series P Notes is made, in whole or in part, pursuant to Section 4.3, Section 4.4 or Section 8.2, as the case may be, at any time while any Series P Notes bear interest at one of the Series P LIBOR Rates (other than the last day of the period in which such Series P LIBOR Rate is applicable to such Series P Notes), the Company agrees to pay to the holders of such Series P Notes, in addition to, and not in lieu of, any other amount due hereunder, on demand by the Series P Agent, such reasonable amount (the “ Indemnification Fee ”)as shall be sufficient to reimburse and indemnify such holders for any loss (including loss of earnings and anticipated profits), cost or expense (including, without limitation, costs or losses associated with prepaying or redeploying deposits) incurred as a result of such payment or prepayment. Any demand by the Series P Agent for payment pursuant to this Section 4.1(d)(vii) shall be accompanied by a schedule setting forth in reasonable detail the computation of any such loss, cost or expense and any Make Whole Amount paid or required to be paid in connection with such payment or prepayment. Each such schedule delivered to the Company shall constitute prima facie evidence of the Indemnification Fee payable by the Company, absent manifest error.

 

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(e) Maximum Rate of Interest. The Company acknowledges and agrees that 12 U.S.C. section 2205 provides that institutions of the Farm Credit System are not subject to any interest rate limitation imposed by any state constitution or statute or other laws, and that any such limitations are preempted, and therefore any interest owing under the Notes, to the extent purchased or held by an institution of the Farm Credit System, is not subject to any ceiling. Accordingly, so long as any of the Notes are held by an institution of the Farm Credit System, there shall be no Maximum Legal Rate of Interest with respect to such Notes. Nonetheless, it is the intention of the Company and holders of the Notes that are not institutions of the Farm Credit System to conform strictly to the Applicable Interest Law. Accordingly, notwithstanding any provisions to the contrary in this Agreement or in any Note, the aggregate of all interest, and any other charges or consideration constituting interest under Applicable Interest Law, that is taken, reserved, contracted for, charged or received pursuant to this Agreement or any Notes (other than Notes held by holders that are not institutions of the Farm Credit System) shall under no circumstances exceed the maximum amount of interest allowed by the Applicable Interest Law. If any interest in excess of such amount is provided for in this Agreement or in any such Notes, then in such event

 

(i) the provisions of this Section 4.1(e) shall govern and control,

 

(ii) the Company shall not be obligated to pay the amount of such interest to the extent that it is in excess of the maximum amount of interest allowed by the Applicable Interest Law,

 

(iii) any interest paid on any such Notes which is in excess of what is allowed by the Applicable Interest Law shall be deemed a mistake and canceled automatically and, if theretofore paid, shall be credited to the outstanding principal amount of such Notes, and

 

(iv) the effective rate of interest on such Notes shall be automatically subject to reduction to the Maximum Legal Rate of Interest.

 

If at any time thereafter, the Maximum Legal Rate of Interest is increased, then, to the extent that it shall be permissible under Applicable Interest Law, the Company shall forthwith pay to the holders of the Notes subject to a prior reduction all amounts (or the permissible part thereof) of such excess interest that the holders of such Notes would have been entitled to receive pursuant to the terms of this Agreement and such Notes had such increased Maximum Legal Rate of Interest been in effect at all times when such excess interest accrued. To the extent permitted by the Applicable Interest Law, all sums paid or agreed to be paid to the holders of any Notes for the use, forbearance or detention of the indebtedness evidenced by the Notes shall be amortized, prorated, allocated and spread throughout the full term of such Notes.

 

4.2 Scheduled Payments.

 

(a) Series O Notes. In the event the Series O Notes are not prepaid prior to July 31, 2011, the entire outstanding principal amount and interest due on the Series O Notes shall mature and be due on July 31, 2011. In addition to paying the entire then outstanding principal amount and the interest due on the Series O Notes on the maturity date thereof (July 31, 2011), the Company shall prepay, and there shall become due and

 

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payable, four hundred sixteen thousand six hundred sixty-seven dollars ($416,667) in aggregate principal amount of the Series O Notes on the last day of January, April, July and October in each year, commencing on April 30, 2002 and ending on April 30, 2011, inclusive. Each such prepayment shall be at one hundred percent (100%) of the amount prepaid, together with interest accrued thereon to the date of prepayment. In addition, if, no less than one hundred twenty (120) days prior to July 31, 2006, the Company and all of the holders of the Series O Notes outstanding at such time, shall fail to agree on a new interest rate for the Series O Notes to be applicable after July 31, 2006, the Company shall prepay, and there shall be due and payable, the entire principal amount of the Series O Notes then outstanding, together with accrued interest, on July 31, 2006, at par.

 

(b) Series P Notes. In the event the Series P Notes are not prepaid prior to July 31, 2011, the entire outstanding principal amount and interest due on the Series P Notes shall mature and be due on July 31, 2011. In addition to paying the entire then outstanding principal amount and the interest due on the Series P Notes on the maturity date thereof (July 31, 2011), the Company shall prepay, and there shall become due and payable, five hundred thousand dollars ($500,000) in aggregate principal amount of the Series P Notes on the last day of January, April, July and October in each year, commencing on April 30, 2002 and ending on April 30, 2011, inclusive. Each such prepayment shall be at one hundred percent (100%) of the amount prepaid, together with interest accrued thereon to the date of prepayment. In addition, if no less than one hundred twenty (120) days prior to July 31, 2006, the Company and all of the holders of the Series P Notes outstanding at such time, shall fail to agree on an amendment to the definition of “Applicable Margin”, the Company shall prepay, and there shall be due and payable, the entire principal amount of the Series P Notes then outstanding, together with accrued interest, on July 31, 2006, at par.

 

4.3 Offer to Prepay upon Change in Control.

 

(a) Notice and Offer. In the event of either

 

(i) a Change in Control, or

 

(ii) the obtaining of knowledge of a Control Event by any officer of the Company,

 

then the Company will, within three (3) Business Days of (x) such Change in Control or (y) the obtaining of knowledge of such Control Event (including via the receipt of notice of a Control Event from any holder of Notes), as the case may be, give written notice of such Change in Control or Control Event to each holder of Notes 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 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

 

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less than all, of the Notes of each Series held by such holder on a date specified in such notice (in respect of such Change in Control, the “ Control Prepayment Date ”)that is not less than thirty (30) days and not more than one hundred twenty (120) 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 such notice). In no event will any Obligor take any action, or permit any Affiliate or Subsidiary to take any action, to permit a Change in Control to occur prior to the Control Prepayment Date.

 

(b) Acceptance and Payment. To accept such offered prepayment, a holder of Notes shall cause a notice of such acceptance (which notice of acceptance may be in respect of one or more Series of Notes held by such holder, but which notice need not treat Notes of all Series held by such holder in the same manner) to be delivered to the Company not later than fourteen (14) days after the date of receipt by such holder of the written offer of such prepayment. 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 (i) an amount equal to the Make-Whole Amount, if any, at the time applicable with respect to the principal amount of the Notes of such Series then being prepaid and (ii) interest on the Notes then being prepaid accrued to the Control Prepayment Date.

 

(c) Officer’s Certificate. Each offer to prepay the Notes pursuant to this Section 4.3 will be accompanied by an officer’s certificate, executed by a Senior Officer of each Issuer and dated the date of such offer, specifying:

 

(i) the Control Prepayment Date;

 

(ii) the principal amount of each Note offered to be prepaid;

 

(iii) the estimated interest to be paid on each such Note, accrued to the Control Prepayment Date;

 

(iv) the estimated Make-Whole Amount with respect to the Series O Notes due in connection with such prepayment (calculated as if the date of such notice were the date of the prepayment and, upon request, calculated in consultation with the holders of the Series O Notes), setting forth the details of such computation;

 

(v) that the conditions of this Section 4.3 have been fulfilled; and

 

(vi) in reasonable detail, the nature and date or proposed date of the Change in Control.

 

Two (2) Business Days prior to the applicable Control Prepayment Date, the Company shall deliver to each holder of Series O Notes that has accepted such offer of prepayment a certificate of a Senior Financial Officer of any Issuer specifying the calculation of the Make-Whole Amount (as calculated in consultation with the holders of the Series O Notes) in respect of the Notes of such Series as of the applicable Control Prepayment

 

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Date. With respect to any such prepayment of the Series P Notes, the holder or holders thereof to receive such prepayment shall use good faith efforts to provide the Company with notice of the Make-Whole Amount (if any) due in respect of such prepayment approximately two (2) Business Days prior to such prepayment (provided, however, that the failure of any such holder to so provide such notice shall not relieve the Company of the obligation to pay such Make-Whole Amount promptly at such later time as such holder shall provide notice to the Company of such amount).

 

(d) Effect of Prepayments . Each prepayment of principal of the Notes of any Series pursuant to this Section 4.3 shall be applied to reduce the principal amount of the Notes of such Series due on the maturity date of the Notes of such Series and to reduce each remaining scheduled required prepayment of principal (if any) applicable to each such Series required by Section 4.2, apportioned on a ratable basis (based on the principal amount due on each such date) among all such amounts.

 

4.4 Optional Prepayments.

 

(a) Optional Prepayments. The Company may, on any scheduled interest payment date after the Restatement Date, 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, if any, at such time in respect of the principal amount of the Notes of such Series being so prepaid; and

 

(ii) interest on such principal amount then being prepaid accrued to the prepayment date.

 

(b) Effect of Prepayments. Each prepayment of principal of the Notes of any Series pursuant to this Section 4.4 shall be applied to reduce the principal amount of the Notes of such Series due on the maturity date of the Notes of such Series and to reduce each remaining scheduled required prepayment of principal (if any) applicable to each such Series required by Section 4.2, in inverse order of maturity.

 

4.5 Notice of Optional Prepayment.

 

The Company will give written notice of any optional prepayment of the Notes to each holder of the Notes not less than fifteen (15) days or more than sixty (60) days before the date fixed for prepayment, specifying:

 

(a) such date (which shall be a scheduled interest payment date);

 

(b) that such prepayment is being made pursuant to Section 4.4;

 

(c) the principal amount of such holder’s Notes to be prepaid on such date with respect to each Series of Notes held by such holder; and

 

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(d) the interest to be paid on each such Note, accrued to the date fixed for prepayment;

 

and shall be accompanied by a certificate of a Senior Financial Officer of the Company as to the estimated Make-Whole Amount with respect to the Series O Notes due in connection with such prepayment (calculated as if the date of such notice were the date of the prepayment and, upon request, calculated in consultation with the holders of the Series O Notes), setting forth the details of such computation.

 

Such notice of prepayment shall also certify all facts that are conditions precedent to any such prepayment. Notice of prepayment having been so given, the aggregate principal amount of the Notes specified in such notice, together with the Make-Whole Amount, if any, and accrued interest thereon shall become due and payable on the specified prepayment date. Two Business Days prior to such prepayment, the Company shall deliver to each holder of the Series O Notes a certificate of a Senior Financial Officer specifying the calculation of the Make-Whole Amount (as calculated in consultation with the holders of the Series O Notes) in respect of the Notes of such Series as of the specified prepayment date. With respect to any such prepayment of the Series P Notes, the holder or holders thereof at such time shall use good faith efforts to provide the Company with notice of the Make-Whole Amount (if any) due in respect of such prepayment approximately two Business Days prior to the scheduled date of such prepayment (provided, however, that the failure of any such holder to so provide such notice shall not relieve the Company of the obligation to pay such Make-Whole Amount promptly at such later time as such holder shall provide notice to the Company of such amount).

 

4.6 Pro Rata Payments.

 

(a) Scheduled Required Prepayments. If, at the time of any required prepayment of the principal of Notes of any Series made pursuant to Section 4.2 there is more than one Note of such Series outstanding, the aggregate principal amount of such required prepayment shall be allocated among the Notes of such Series at the time outstanding pro rata in proportion to the respective unpaid principal amounts of all such outstanding Notes of such Series.

 

(b) Optional Prepayments.

 

(i) Allocation among Series. If, at the time of any optional prepayment of the principal of Notes made pursuant to Section 4.4 there is more than one Series of Notes outstanding, the Company may:

 

(A) prepay the Series P Notes with or without prepaying the Notes of any other Series; or

 

(B) prepay the Series O Notes; provided that in the case of any such prepayment, the aggregate principal amount of such optional prepayment shall be allocated between the Series O Notes and the Series P Notes at the time outstanding pro rata in proportion to the respective unpaid principal amounts of each such Series.

 

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(ii) Allocation within Series. If, at the time of any optional prepayment of the principal of Notes of any Series made pursuant to Section 4.4 there is more than one Note of such Series outstanding, the aggregate principal amount of such optional prepayment shall be allocated among the Notes of such Series at the time outstanding pro rata in proportion to the respective unpaid principal amounts of all such outstanding Notes of such Series.

 

4.7 Notation of Notes on Prepayment.

 

Upon any partial prepayment of a Note, such Note may, at the option of the holder thereof, be

 

(a) surrendered to the Company pursuant to Section 5.2 in exchange for a new Note of the same Series, 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 is prepaid, 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 prepaid principal amount of any Note.

 

4.8 No Other Optional Prepayments.

 

Except as provided in Section 4.4, the Company may not make any optional prepayment (whether directly or indirectly by purchase or acquisition) in respect of the Notes.

 

5. REGISTRATION; SUBSTITUTION OF NOTES.

 

5.1 Registration of Notes.

 

The Company will cause to be kept at its office, maintained pursuant to Section 6.3, a register for the registration and transfer of Notes. The name and address of each holder of one or more Notes, each transfer thereof and the name and address of each transferee of one or more Notes shall be registered in the 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.

 

5.2 Exchange of Notes.

 

(a) Upon surrender of any Note at the office of the Company maintained pursuant to Section 6.3 duly endorsed or accompanied by a written instrument of transfer duly executed by the registered holder of such Note or its attorney duly authorized in writing, the Company will execute and deliver, at the Company’s expense (except as provided below), new Notes of the same Series in exchange therefor, in denominations of

 

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at least five hundred thousand dollars ($500,000) (except as may be necessary to reflect any principal amount not evenly divisible by five hundred thousand dollars ($500,000)), 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, shall be of the same Series as the surrendered Note and shall be substantially in the form of the Exhibit Al or Exhibit A2, as the case may be, corresponding to the Series of the surrendered Note. 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 or other issuance 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.

 

5.3 Replacement of Notes.

 

Upon receipt by the Company of evidence reasonably satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of any Note (which evidence shall be, in the case of an Institutional Investor, notice from such Institutional Investor of such ownership (or of ownership by such Institutional Investor’s nominee) and 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 an Institutional Investor, such Institutional Investor’s own unsecured letter 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, within five (5) Business Days after such receipt, deliver, in lieu thereof, a new Note of the same Series, dated and bearing interest from the date to which interest shall have been paid on such lost, stolen, destroyed or mutilated Note or dated the date of such lost, stolen, destroyed or mutilated Note if no interest shall have been paid thereon.

 

5.4 Issuance Taxes.

 

The Company will pay all taxes (if any) due in connection with the execution and delivery of this Agreement and in connection with any modification, amendment or waiver of any Financing Document 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 hereof.

 

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6. GENERAL COVENANTS.

 

The Company covenants and agrees that on and after the Restatement Date and thereafter for so long as any of its obligations under the Note Purchase Agreements and the Notes shall be outstanding:

 

6.1 Payment of Taxes and Claims.

 

The Company shall, and shall 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, 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 (x) while being contested in good faith and by appropriate proceedings diligently pursued as long as adequate book reserves have been established and maintained and exist with respect thereto, and (y) so long as 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.

 

6.2 Maintenance of Properties and Corporate Existence. The Company shall, and shall cause each Subsidiary to,

 

(a) Property — maintain its Property in good condition, ordinary wear and tear excepted, and make all necessary renewals, replacements, additions, betterments and improvements thereto, and, in addition to the foregoing, the Guarantors shall collectively, during each year, either expend or invest an aggregate amount equal to at least fifty percent (50%) of Depreciation determined for the then most recently ended fiscal year of the Company on repairs, maintenance or capital improvements to the “Improvements” (as such term is defined in the Deeds of Trust);

 

(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 comparable ratings by any comparable successor rating agency), insurance (including, without limitation, the insurance required by the Security Documents) 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 the case of corporations of established reputations engaged in the same or a similar business and similarly situated; provided that the Company and the Subsidiaries may maintain one or more systems of self-insurance if adequate reserves are maintained with respect thereto and if such systems are implemented and operated in a manner consistent with the sound financial practices of similarly situated corporations of established reputations that maintain similar systems of self-insurance;

 

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(c) Financial Records — maintain sound accounting policies and an adequate and effective system of accounts and internal accounting controls that will safeguard assets, properly record income, expenses and liabilities and assure the production of proper financial statements in accordance with GAAP;

 

(d) Corporate Existence and Rights — do or cause to be done all things necessary

 

(i) to preserve and keep in full force and effect its existence, rights and franchises,

 

(ii) to ensure that the Company legally and beneficially owns one hundred percent (100%) of the capital stock of each of the Guarantors, and

 

(iii) to maintain each Subsidiary as a Subsidiary, except as otherwise permitted by Section 6.14 and Section 6.15(b); 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, the USA Patriot Act and any Environmental Protection Law) and not fail to obtain any license, permit, franchise or other governmental authorization necessary to the ownership of its Properties or to the conduct of its business if such violation or failure to obtain could be reasonably expected to have a Material Adverse Effect.

 

6.3 Payment of Notes and Maintenance of Office.

 

The Company shall punctually pay, or cause to be paid, the principal of and interest (and Make-Whole Amount, if any) to become due in respect of, the Notes, as and when the same shall become due according to the terms hereof and of the Notes, and shall maintain an office at the address of the Company set forth in Section 10.1 where notices, presentations and demands in respect hereof and of the Notes may be made upon it. Such office shall be maintained at such address until such time as the Company shall notify the holders of the Notes of any change of location of such office, which shall in any event be located within the United States of America.

 

6.4 Intentionally Deleted.

 

6.5 Consolidated Working Capital.

 

The Company shall not at any time permit Consolidated Working Capital to be less than Two Hundred Fifty Million Dollars ($250,000,000).

 

6.6 Funded Debt to Capitalization Ratio.

 

The Company shall not at any time permit Consolidated Funded Debt to exceed sixty-five percent (65%) of Consolidated Total Capitalization.

 

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6.7 Maintenance of Funded Debt.

 

The Company shall not permit Consolidated Funded Debt, determined as of the end of each fiscal quarter of the Company, to exceed four hundred percent (400%) of Consolidated EBITDA for the period of four (4) consecutive fiscal quarters of the Company ended at such time.

 

6.8 Consolidated Interest Coverage Ratio; Consolidated Fixed Charges.

 

(a) The Company shall not permit the ratio of Consolidated EBITDA to Consolidated Interest Expense for any period of four consecutive fiscal quarters of the Company to be less than 3.00 to 1.00.

 

(b) The Company shall not at any time permit the ratio of Consolidated Net Income Available for Fixed Charges (calculated in respect of the period of eight (8) consecutive fiscal quarters of the Company then most recently ended) to Consolidated Fixed Charges (calculated in respect of such period) to be less than 1.50 to 1.00.

 

6.9 Restrictions on Dividends, etc.

 

The Company shall not, and shall not permit any Subsidiary to, create or otherwise cause or suffer to exist or become effective any restriction or encumbrance (other than statutory, regulatory or common law restrictions) on the right or power of any Subsidiary to

 

(a) pay dividends or make any other distributions on such Subsidiary’s stock to the Company or any Subsidiary,

 

(b) pay any indebtedness owed by such Subsidiary to the Company or any Subsidiary,

 

(c) make loans or pay advances to the Company or any Subsidiary, or

 

(d) transfer any of its Property to the Company or any Guarantor;

 

provided, however, that:

 

(x) a Subsidiary may be subject to an encumbrance or restriction described in subsection (d) above if such encumbrance or restriction (i) restricts in a customary manner the subletting, assignment or transfer of any property or asset that is subject to a lease, license, or similar contract, (ii) exists by virtue of any transfer of, agreement to transfer, option, or right with respect to, any property or assets of the Company or any Subsidiary not otherwise prohibited by this Note Purchase Agreement, or (iii) is contained in a security agreement, mortgage or other similar document securing Debt of the Company or any Subsidiary that is permitted hereunder to the extent such restriction or encumbrance restricts the transfer of the property subject to such agreement, or (iv) ordinary course provisions restricting the assignability of contracts;

 

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(y) a Subsidiary may be subject to restrictions on the payment of dividends or the making of other distributions on its stock to the Company or the other Subsidiaries so long as such restrictions permit the payment of such dividends and the making of such other distributions that are necessary in order to make any and all payments due (including, without limitation, any and all amounts due by way of acceleration, required or optional prepayment or otherwise) in connection with the Notes, the Note Purchase Agreements and the other Financing Documents, and any and all indebtedness used to refinance or repay such indebtedness (without increase as to principal amount or interest rate of such refinancing indebtedness); and

 

(z) a Subsidiary may be subject to any such encumbrance and restriction that is not otherwise allowed under subsections (x) and (y) above, so long as the aggregate contributions to Consolidated EBITDA for the period of four (4) fiscal quarters then most recently ended of all Subsidiaries subject to such encumbrances and restrictions that are not otherwise allowed under subsections (x) and (y) above, are less than or equal to fifteen percent (15%) of such Consolidated EBITDA; such contribution shall be based on the earnings before interest, taxes, depreciation and amortization of each such Subsidiary for such fiscal year.

 

6.10 Consolidated Net Worth.

 

The Company shall not at any time permit Consolidated Net Worth, determined at such time, to be less than the sum of

 

(a) one billion four hundred fifty million dollars ($1,450,000,000), plus

 

(b) the sum of the Company Fiscal Year Net Worth Increase Amounts calculated for all fiscal years of the Company ended on or after the Restatement Date.

 

6.11 Terrorism Sanctions Regulations.

 

The Company will not and will not permit any Subsidiary to (a) become a Person described or designated in the Specially Designated Nationals and Blocked Persons List of the Office of Foreign Assets Control or in Section 1 of the Anti-Terrorism Order or (b) engage in any dealings or transactions with any such Person.

 

6.12 Restricted Payments and Restricted Investments.

 

(a) Limitation on Restricted Payments and Restricted Investments. The Company shall not, and shall not permit any Subsidiary to, at any time declare or make or incur any liability to declare or make any Restricted Payment (other than Restricted Payments comprised solely of Distributions to the Company or a Wholly-Owned Subsidiary in respect of the capital stock of a Subsidiary (“ Permitted Distributions ”))or make or authorize any Restricted Investment, unless

 

(i) immediately after giving effect to the proposed Restricted Payment or Restricted Investment, the aggregate amount of all Restricted Payments (other than Permitted Distributions) and Restricted Investments in each case made or authorized after February 1, 2000 does not exceed the sum of

 

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(A) one hundred million dollars ($100,000,000); plus

 

(B) fifty percent (50%) of the aggregate Consolidated Net Income (or, in case such aggregate Consolidated Net Income shall be a deficit, minus one hundred percent (100%) of such deficit) for the period commencing on February 1, 2000 and ending on the date of such proposed transaction; plus

 

(C) one hundred percent (100%) of the aggregate net cash proceeds received by the Company after March 9, 2000 from the issuance or sale of shares of capital stock of the Company (other than Mandatorily Redeemable Stock); plus

 

(D) the market value of (but in any event not exceeding the Fair Market Value of the assets or stock acquired with) the shares of capital stock issued by the Company in payment for the stock or assets of any Person acquired by the Company or any Subsidiary after March 9, 2000 in an arm’s-length transaction;

 

(ii) immediately prior to, and immediately after giving effect to the proposed Restricted Payment or Restricted Investment, the Company would be permitted by Section 6.6 to incur at least one dollar ($1.00) of additional Funded Debt owed to a Person other than a Subsidiary; and

 

(iii) immediately prior to, and immediately after giving effect to, the proposed Restricted Payment or Restricted Investment, no Default or Event of Default exists or would exist.

 

(b) Time of Payment of Distributions. The Company shall not, and shall not permit any Subsidiary to, authorize a Distribution on its capital stock that is not payable within sixty (60) days of authorization.

 

(c) Subsidiaries. Each Person that becomes a Subsidiary after the Restatement Date shall be deemed to have made, at the time it becomes a Subsidiary, all Restricted Investments of such Person existing immediately after it becomes a Subsidiary.

 

6.13 Liens.

 

(a) Negative Pledge. The Company shall not, and shall not permit any Subsidiary to, cause or permit, or agree or consent to cause or permit in the future (upon the happening of a contingency or otherwise), any of their Property, whether now owned or hereafter acquired, to be subject to a Lien except:

 

(i) Liens securing taxes, assessments or governmental charges or levies or the claims or demands of materialmen, mechanics, carriers, warehousemen, landlords and other like Persons, provided that the payment thereof is not at the time required by Section 6.1 or by any provision of the other Financing Documents;

 

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(ii) 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 6.13(a)(iii)) 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;

 

(iii) Liens

 

(A) arising from judicial attachments and judgments,

 

(B) securing appeal bonds, supersedeas bonds, or

 

(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 the execution or other enforcement of such Liens is effectively stayed and the claims secured thereby are being actively contested in good faith and by appropriate proceedings, and provided further that the aggregate amount so secured shall not at any time exceed one million dollars ($1,000,000);

 

(iv) 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 Properties in the ordinary conduct of the owning Person’s business;

 

(v) (A) Liens (of a type other than set forth in Section 6.13(a)(ix)) in existence on the Closing Date, more specifically described on Part 6.13(a)(v) of Annex 2; and

 

(B) Liens securing renewals, extensions and refinancings of Debt secured by the Liens permitted by clause (A) immediately above, provided that the amount of Debt secured by each such Lien is not increased in excess of the amount of Debt outstanding on the date such Lien was originally created, and none of such Liens is extended to include any additional Property of the Company or any Subsidiary;

 

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(vi) on or prior to the Collateral Release Date, Liens on the Collateral

 

(A) in favor of the Security Trustee for the benefit of the holders of the Notes that secure obligations under any of the Financing Documents, and

 

(B) constituting Permitted Exceptions;

 

(vii) on or prior to the Collateral Release Date, Liens on Property (other than the Collateral) securing Funded Debt (other than Funded Debt outstanding under the Credit Facility) incurred and permitted to exist in accordance with the provisions of Sections 6.6 and 6.7;

 

(viii) Purchase Money Liens, if, after giving effect thereto and to any concurrent transactions:

 

(A) each such Purchase Money Lien secures Debt in an amount not exceeding the cost of acquisition or construction of the particular Property to which such Debt relates; and

 

(B) no Default or Event of Default would exist;

 

(ix) on or prior to the Collateral Release Date, Liens on Property of the Subsidiaries primarily constituting inventory or accounts that secure obligations arising under Revolving Credit Agreements of the Company or any Subsidiary; and

 

(x) after the Collateral Release Date, Liens securing Debt of the Company or any Subsidiary, provided that at the time of the incurrence thereof and after giving effect thereto and to the concurrent retirement of any other Debt,

 

(A) the aggregate outstanding principal amount of all Debt of the Company and the Subsidiaries secured by Liens (including, without limitation, Liens permitted by Section 6.13(a)(v) and Section 6.13(a)(viii)) would not exceed fifteen percent (15%) of Consolidated Tangible Net Worth, determined at such time; and

 

(B) no Default or Event of Default would exist.

 

(b) Collateral. Nothing in this Section 6.13 shall be deemed to permit the Company or any Guarantor to cause or permit, or agree or consent to cause or permit in the future (upon the happening of a contingency or otherwise), any of the Collateral, whether now owned or hereafter acquired, to be subject to a Lien in violation of the terms of the Security Documents.

 

(c) Stock. Notwithstanding anything to the contrary in Section 6.13(a), the Company shall not, and shall not permit any Subsidiary to cause or permit, or agree or consent to cause or permit in the future (upon the happening of a contingency or otherwise), any of the capital stock of any Subsidiary, whether now owned or hereafter acquired, to be subject to a Lien.

 

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(d) Equal and Ratable Lien; Equitable Lien. In case any Property not otherwise the subject of a prior perfected Lien in favor of the Security Trustee shall be subjected to a Lien in violation of this Section 6.13, the Company shall forthwith make or cause to be made, to the fullest extent permitted by applicable law, provision whereby the Notes shall be secured equally and ratably with all other obligations secured thereby pursuant to such agreements and instruments as shall be approved by the Required Holders, and the Company shall 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, and in any such case the Notes shall have the benefit, to the full extent that, and with such priority as, the holders may be entitled thereto under applicable law, of an equitable Lien on such Property securing the Notes. Such violation of this Section 6.13 shall constitute an Event of Default hereunder, whether or not any such provision is made pursuant to this Section 6.13(d).

 

(e) Financing Statements. The Company shall not, and shall 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 6.13 or to evidence for informational purposes a lessor’s interest in Property leased to the Company or any such Subsidiary.

 

6.14 Merger; Acquisition.

 

(a) Merger and Consolidation. The Company shall not, and shall not permit any Subsidiary to, merge with or into, consolidate with, or sell, lease as lessor, trans